If you are planning to take in a lodger – or have already done so – there are a few things you should consider, such as their impact on your exposure to property tax and income tax, insurance, and maintenance costs.
According to figures from LV=, twice as many households now have a lodger than was the case five years ago, and it takes just eight days to find a tenant on average.
Unsurprisingly, the rental income derived from having a lodger is the main motivation; but as many are likely to be friends or extended family members, our property accountants have seen some landlords putting themselves at financial risk to accommodate them.
LV=’s figures show only 44% of landlords ask for a deposit when taking in a lodger, and 79% who don’t say it is because they know the person.
But 31% have seen a lodger leave without paying – and the same proportion are never paid on time, leaving 8% of all landlords out of pocket by an average of £307 at any one time.
If you think a lodger is your best way to boost your income, speak to our property accountants, and we can help you to understand the direct impact property tax, income tax and other such issues might have on the amount you ultimately end up making from letting out your home.