Make money from your home

Renting your spare room can help
you make money

According to Nationwide, house prices have fallen by over 14% over the last year, however, it's certainly not all doom and gloom for UK households because there are a number of ways homeowners can make money from their property.

Struggling vendors, as well as those who are simply looking at ways to increase their income during the recession, can all benefit, as homeowners look to increasingly creative and inventive ways to earn money from their homes.

Find a tenant

Renting a spare room in your house is probably one of the most obvious ways to create an extra source of income. While you may have a room which you currently use as storage space or as a home office, for example, you might wish to consider whether it would be of greater benefit to you to rent it out.

There are several ways to let your spare room, you can find a full-time tenant, or choose a shorter-term option, such as renting the room to a university student for a semester.

According to Abbey Mortgages, roughly 388,000 homeowners rent their spare rooms, and with the average rental charge set at £289 a month, there's the potential to boost your annual income by almost £3.5k.

One of the key advantages of renting your spare room is the fact that, under the government's 'rent-a-room' scheme, you can earn up to £4,250 tax-free. To qualify, the room you are letting out needs to be furnished and in your main home.

If you should decide to rent out your spare room and you have a mortgage, make sure you check your lender and insurer's terms and conditions; vet all potential tenants; and get a signed agreement which includes information on notice period, rental charges, the share of household bills and house rules.

Save on holidays

You could save a lot of money on hotel bills by taking part in a house swap and exchanging your home for another. A number of agencies specialise in house swaps, and although they typically charge from £30 to £115 a year; that is all you will need to pay.

The thinking behind this is that someone enjoys a holiday in your home while you do likewise in their house. Not only can you swap your home with homeowners in the UK, but you can also swap your house with properties right across the world.

Lights, camera, action

Renting out your home for use by a film, TV or advertising production company means you could make anything from about £250 to over £3,000 a day. Your house doesn't need to be a mansion or a stately home either because production companies look for all sorts of property, from family homes through to period houses. If your home has large rooms and easy parking this can work in your favour.

Registering with an agency to earn money in this way is relatively simple – you just need to send some photos of your home and fill in a form. Registration is usually free of charge, with the agency taking a cut of any fees paid instead.

Rent out extra parking space

If you have spare parking space on your drive or in your garage, renting it out can be a great way to make money, especially if the space is close to a city centre, a train station, hospital, or any major attractions, such as a concert venue.

Depending on the level of demand, the location, and how safe the parking spot is, you could make up to £30 a week. Remember to make sure that your insurance covers you for renting out the parking space though before you begin.

Green space

If you have an allotment you may wish to consider renting it out because allotments tend to be in short supply, particularly in major cities. Make sure that once you have advertised and found someone to rent the space, you draw up a contract which details when and how the allotment can be used.

Rent your home during an event

If your property is near the venue of a major event, such as Glastonbury or Wimbledon, renting your home out to fans or those involved in the event can be a great way to make some extra money.

Martyn Hocking from consumer body 'Which?' says: "Incomes vary, but generally you can charge much more for short-term lets than long ones."

Mr. Hocking also advises anyone looking to earn money in this way, to check rental rates with local agents.

Anita Monteith of the Institute of Chartered Accountants in England and Wales explains that anyone who decides on a short-term rental contract must inform HM Revenue & Customs of any tax liability.

"It is prepared to chase even small amounts of money and will take evasion of tax on short-term letting income very seriously," says Ms. Monteith.

"Declare it on your self-assessment form. If in doubt, seek professional advice."

Source: Manchester Evening News and The Observer | Last updated: 9th February 2009

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