Friday, February 16, 2018

Money Tips Daily - Earn Extra Tax Free Cash With Rent a Room Scheme

Welcome to Money Tips Daily.

We have looked at various ways of saving money, so today I want to give you a few tips on how to earn some extra cash!

There are hundreds of ways of generating additional income in your spare time from starting a small business from home, digital marketing and sales or MLM. I actually run a Facebook page called home based business ideas.

If you’re not inclined to start a business just yet and are struggling to make ends meet, you might want to consider these simple money making tips:

Rent a Room Scheme

The UK government allows you to earn up to £7500 tax free per year from renting out accommodation in your home.

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. You don't have to stop at £7500 by the way, you just have to pay a little extra tax. Always consult your legal and tax advisers. 

How do you find tenants?

Tenants are easy to find in most areas (for instance, where there is employment or transport links) using websites like Airbnb and

Airbnb clients tend to be looking for short-term accommodation, although in my experience they can turn into long-term guests. The good thing about Airbnb is that they take care of collecting payments and has insurance in case things go wrong. You will generally be expected to provide bedding and towels like a guest house, but the higher rent should compensate you for this. The disadvantage is that guests will come and go which means more work.

Other sites like spare room and Monday to Friday provide you with a platform to advertise your room. Once the potential tenant makes contact you will have to deal with references and tenancy agreements. Advantages that you should be able to find a longer time tenant and will not have to provide additional services like bedding and cleaning. These sites generally charge you a flat fee to advertise your room and all the rent is yours, but there is no guarantee you’ll find a tenant. Airbnb makes no charge to list your room on their site, which has millions of visitors, but will take a percentage from the rent.  

You can of course use traditional methods like putting a card in the shop window, but this carries more risk and I've found you get better quality tenants through online advertising.

Whichever method you use to find lodgers there are plenty of people out there looking for a room, because renting an apartment is outside of their budget or they just need something temporary.

A few words of caution. Always take up references and use a legal assured shorthold tenancy agreement (AST) unless you’re taking Airbnb guests. If in doubt, consult your lawyer and take legal advice. 

You can find out more from organisations such as the National Landlords Association or on consumer website such as citizens advice. 

The 'gut' feeling most landlords ignore

I would also follow your own instincts and gut feeling about a person before letting them take up residence in your home. If there’s something you don’t feel is quite right about a potential lodger, go with your gut feeling or check them out further. For me, this is more important than references, but don't go completely freehand gung ho and skip the referencing process.

There are dozens of ideas around the ‘sharing’ economy including: car sharing on your journey to work and renting out your driveway for parking while you’re out at work.

Tomorrow, I’ll give you another cash generating tip which could turn into a profitable online business allowing you to work from home and quit the rat race. 

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