Sharing your home is a popular way to earn extra money, meet new people and make the most of your property. Here are eight key questions to ask yourself if you’re thinking of letting out part or all of your home on a short-term basis.
- Where do I start?
- Will my income be tax free?
- Essential checks
- Tips for property listings
- Managing bookings
- How much to charge
- Safety and security
- Preparing your home
1. I want to let out part or all of my home. Where do I start?
If you’re interested in renting out a room, or your entire property, short-term letting offers a flexible way to share your space, allowing you to charge a cost per night and choose dates convenient to you.
There are several ways to get started, including looking for an estate agent who offers a short-term letting service. Another popular option is registering with a third-party short-let company. As well as listing the details of your home, these companies will also allow potential guests to get in touch or book their stay directly.
You’ll need to check with your local authority whether there are any restrictions on short-term lets in your area. In Greater London, for example, you can only short-let an entire property for up to 90 days annually. There are different rules depending on where you live in the UK.
Remember, bookings aren’t guaranteed and there can be peaks or troughs in demand. If you would prefer to have a regular paying tenant, then renting out a room or your property on a longer-term basis may be a better option for you.
2. Will my income be tax free?
Money you earn from short-letting your home will be treated as income and, as a result, may be subject to income tax
But there are some measures that could help reduce any tax liabilities. The government’s rent a room relief allows you to earn up to £7,500 a year tax-free if you’re letting out furnished accommodation in your only or main residence. Legislation due to come into force in the tax year beginning April 2019 (or later) is designed to ensure that the relief can only be claimed by people who are also residing in the property for all or part of the duration of the let.
The government also introduced a property allowance in 2017, giving individuals an exemption on income tax from property business profits of up to £1,000. This can be claimed on short-term lets that aren’t eligible for rent a room relief. Find out more at GOV.UK1.
3. Is there anything I should check before I go ahead?
Before you let out a room or share your home, ask your mortgage lender and insurance provider whether there are any restrictions. Your ability to let out or share your property may depend on your contracts and agreements.
Typically, borrowers aren’t permitted to engage in activities that would invalidate their home insurance. With a Barclays mortgage, you can only let out your home on a short-term basis if you have a valid Assured Shorthold Tenancy (AST) in place for a minimum of six months. Our mortgage borrowers would also need to get written consent before sharing their property.
Always inform your home insurance provider if you’re considering sharing or letting out your property. Call your insurance provider to clarify what your policy terms are, and whether they need to be updated in light of your plans. Policy terms can be changed on a case-by-case basis.
4. How can I make my property stand out online?
Good quality images will make your listing look appealing. Take photos in daylight and ensure your rooms are tidy. It pays to give potential guests a comprehensive picture, so show all the rooms they’ll be able to access, including any communal areas. It’s also a good idea to highlight any special features of the property, unusual decorative touches or impressive views; and to include some images of the area, such as local tourist attractions.
Consider the description of your property carefully, too. Don’t be afraid to make it personal. People are choosing to stay in your home rather than a hotel, after all, so there’s a good chance they’ll be interested in getting an owner’s perspective.
Most short-let websites display ratings from people who have stayed in your property. If you receive consistent high scores, you may be awarded with a higher profile status, like Stephanie Ayres, who lets two properties in the Cotswolds. She says: “Having a high rating has meant I get a lot more enquiries, as people trust me. It’s something I also look out for when I book properties as a guest as it guarantees a certain level of service.”
5. What’s the best way of managing bookings?
If you’re considering managing bookings yourself, bear in mind the time commitment it may require. You’ll need to respond to bookings and queries, prepare the room or property, and potentially be available to hand over the keys.
Alternatively, consider a management company, which can handle everything from creating your listing and organising cleaning to vetting guests and arranging property maintenance. James Jenkins Yates, CEO of management company Airsorted, says: “Many of our hosts let their properties while they’re travelling, so we’re used to taking care of everything while they’re away.
6. How do I know how much to charge?
Your charges may depend on several factors, including location, seasonality and the number of rooms available. At peak times, such as August or over Christmas, it’s common to charge more. If you’re not sure where to start, compare your property to similar ones listed in your area. Or, if you’re using a management company, they should suggest an appropriate price.
There’s usually no cost for listing your property on short-let sites but, for every completed booking, you’ll be charged a fee. Similarly, if you use a management company, they’ll take a percentage of your total booking cost, so factor this into your pricing.
Consider, too, that with an increase in footfall at your property, you may experience higher rates of wear and tear. You’ll need to pay for repairs and maintenance as well as bills, extra linen and other costs.
To guarantee that a booking is worthwhile, some people request that those wishing to stay book a minimum number of consecutive nights. It helps to make sure you’re not out of pocket.
7. How can I help ensure my home and possessions will be safe?
Whenever you let out all or part of your property, you have to consider the possibility of unexpected damage. Most short-let services have an insurance policy, and it’s worth finding out the specific details of whichever company you use.
As your possessions will be on show, it might also help to keep an inventory so you can check that your property and belongings are in the same condition after a guest’s stay as before. Another option is to store any valuables securely: in a locked room, for example.
Home security is a key issue. “If you have a monitored home security alarm, it’s worth considering an electronic key fob if you’re letting out your entire property,” says Lee Jasper, spokesperson at security experts ADT. “It’s bad practice to share alarm codes, and fobs can’t be copied. Additionally, if you have a smart home system, you can set it up so that you’re alerted every time it’s used, which adds another layer of security.”
You may also want to inform your neighbours that other people will be accessing the property, and provide a contact number in case of emergencies.
8. What do I need to do to prepare in advance?
This depends on the kind of let you are offering and the commitments you are making to anyone staying in your property.
For some, you might simply need to provide a clean room and ensure that communal spaces have the expected facilities. For others, a welcome pack with freshly laundered towels may be a minimum requirement.
Stephanie goes the extra mile to make sure her properties are well-received. “To assist guests, I provide a folder of details about the local area, a selection of miniature toiletries, basic cooking ingredients and fuel for the barbecue, so they feel at home. I also offer to help them with any activities they have planned or to hire extras, like a personal chef, pamper packages or bicycles.”
If you’re not going to be readily available for your guests, it’s important to leave any instructions that may assist them, whether it’s how to use the heating or where the nearest parking facilities are.
You should also undertake a health and safety risk assessment for your home, which could include checking the smoke alarm, removing any trip hazards and putting up fire exit signs.
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