Credit crunch - Rent A Room scheme helps homeowners - Do i need Landlords Insurance?


Hard up homeowners are renting out their spare rooms to help with spiraling mortgage and utility bills. Spare rooms can provide a valuable tax free income if homeowners follow a few simple rules.

The Government's Rent A Room scheme can help people who have lodgers living in furnished accommodation in their only or main home. And the money you earn is tax-free up to £4,250 a year, or around £350 a month. The scheme can be used by homeowners as well as tenants, but you should check first with your landlord whether you are allowed lodgers. You should also tell your insurance company and mortgage lender.

So you have the room, what do you do next?

The internet has hundreds of sites dedicated to promoting your room and helping you find the right lodger. If you live somewhere where a lot of people travel to for work, you might want to consider renting a room from Monday to Friday only. Lots of people commute to work and the hassle, expense and time spent traveling mean more and more commuters are looking for accommodation Monday to Friday.

Most cities and large towns also have a large student population. Students will generally need somewhere to work as well as sleep, so a bigger room with a desk may well be needed, but on the plus side, you�ll generally get the place to yourself over the holidays. To find out more contact the accommodation officer at your local university or college.

Do i need Landlords Insurance?

Most home insurance policies will cover a lodger; however it is important to check this with your broker and pay any additional premiums required before anyone moves in.

Spare room renting top five tips:

Inform your insurer immediately.
Advise your local council to ensure its council tax records are updated.
Obtain references from the lodger.
Don't allow your lodger to store expensive equipment.
Make sure your lodger knows your burglar alarm codes and uses keys and locks properly.


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