20 March 2014

Do You Live Alone Or Have A Spare Room?

If you have a spare room to share, you might consider renting it out; or if you live alone, you might think about renting out your whole flat while away.  You can turn a pretty profit off your extra space or absence.

In the UK, you’re even allowed to earn up to £4,250 of tax-free income in this manner.

The government’s “Rent a Room” scheme was devised to encourage homeowners or renters to take advantage of this. 

Rent a Room Scheme 

  • The scheme requires that you rent out a fully furnished room or a section of your main property; this can be an entire floor, but not a self-contained flat.  Renting out an unfurnished room disqualifies you from the scheme.
  • No need to be a homeowner; if you’re a tenant, simply get your landlord’s consent before renting your room. 
  • If the annual income earned from the rental is less than £4,250 (about £350 per month), it’s unnecessary to file the income taxes, as the exemption is automatic.  However, if you earn more than £4,250 from the rental, you must inform the tax office. 
  • Those who do file a tax return might consider that insurance and wear-and-tear expenses cannot be claimed under the scheme.  In this case, you may be still take advantage of your extra space outside of the scheme, but your earnings will be taxable. 

Rent a Room Options 

A plethora of room/flat rental websites exist inside and outside the UK, making turning a profit on your pad easier than ever.  From the ever popular Airbnb to Wimdu, from Spareroom to Homexchange, you can list your room or flat and reach an international audience, enabling people from all over the world to browse your space and lock it down for a visit.

These sites allow both hosts and guests peace of mind when it comes to sharing space with a stranger, often including references and site guarantees that will save you, the host, from financial worries and save your guests from travel worries.   Let’s take a look at the specs of just one in a number of options; how the site works, and the “peace of mind” it offers.

Airbnb How to Host 

With three simple steps, you can list your space on Airbnb and like-websites.
  1. First set up an account and a profile. In order to get verified and build a rep, ask your friends, family and acquaintances for some stellar references. 
  2. Once you’ve got a decent backing, the next step is to list your space.  To do this, sign in and click the List Your Space button under your account.   Give a thorough description of your rental, its location and the amenities available to guests (more info usually leads to a higher volume of requests).  Set your pricing, in addition to a cleaning fee or security deposit if you so choose.  Also set the space’s availability in order not to be bombarded with requests when the listing is unavailable.  And finally, choose a payment method so that you can GET PAID! 
  3. Now that you’ve got a listing, requests will come pouring in, and you’ll be able to book your space.  Any reservation requests or prospective guest messages should be answered with the site’s messaging system promptly.   If you delay answering, your search placement and response rate will plummet, making your listing less appealing to guests.  Once you’ve booked a guest and their rental period is up, you can review them upon check-out.  This is how trust and peace of mind is built. 

Airbnb Peace of Mind Along with Other Bits & Bobs

  • With the Airbnb Host Guarantee, hosts are offered up to £600,000 of protection.  Hosts only pay 3% of a successfully booked listing; otherwise the listing is completely free.  Airbnb also handles all payments, so that hosts are paid in full, via direct deposit, PayPal or check. 
  • When you post a room or flat (or any space of your choosing), you can request that a professional photographer visit and photograph the site listing at no charge to you, so that your listing is made more attractive to potential guests.  Your listing will be automatically translated into 25 languages, and there is also an account calendar which enables you to manage your availability, seasonal prices, and reservation booking.
  • User profiles allow the host to read about their potential guests’ habits and interests, consider their references, and the message system enables communication between host and guest throughout the booking process.  As a host, you can accept or decline a request.  Likewise, guests can read up on their hosts, and consider their reviews and reputation. 
  • The Airbnb customer support team is available 24/7, so hosts or guests can contact the site if discrepancies arise. 
  • Airbnb knows that shit happens, so there are several cancellation policies to choose from. Choose whichever suits your needs, and Airbnb will uphold the policy. 
Through the UK’s Rent a Room scheme, you’ll be exempt from taxation; while outside the scheme, despite being taxed on earnings, you may be able to profit even more.  The rental process doesn’t simply have to be lucrative however.  You’ll also have the opportunity to meet people from all over, making friends in the process.  Looking into a potential guest’s online profile, you can even choose to accept those compatible guests whose likes and dislikes parallel your own, making way for more likely friendships.  Turn your empty space into a big pile of pounds sterling and a treasure chest of new found friends.

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