If you’re fortunate enough to own your own property, find out how to utilise your home for an additional income without needing to sell up and downsize. That extra money can be a welcome lifeline, or a way to fund growing your self-employed business.
A house or flat is likely to be the most expensive asset you’ll ever own, so it makes sense to make the most of it. And even if you’re renting, it might be possible to speak with your landlord or letting agency in some cases.
Before you jump into earning some extra money from your home, it’s important to check whether you may need to notify both your local council and home insurance provider. And you’ll also need to understand any tax implications. At the time of writing, the first £1,000 of income is a tax-free property allowance, but you’ll also need to declare it as part of your Self Assessment returns each year.
Investing a little time and effort into exploring your options can definitely be worthwhile. Even by sharing your home for just a few days each year or sacrificing a little outdoor space, you could potentially earn thousands in additional income. Especially if you’re located somewhere which is in high demand for part of the year.
Renting rooms to lodgers
The most obvious way to free up some extra income from your property is to let out one or more rooms to lodgers. And with the Rent a Room scheme in the UK, you can earn up to £7,500 tax free each year for letting furnished accommodation.
You can set the rent at whatever figure you feel is appropriate. And if you continue to live in the property and share a kitchen, bathroom or living room, the lodger is likely to be classed as an ‘excluded tenant.’ This means you can set fixed terms to rent rooms for a set number of weeks or months, you’ll only have to give reasonable notice to end the agreement, and you don’t have to go to court to evict them.
Most tenancy agreements specifically prohibit subletting if you’re renting yourself, but it may be possible to talk to your landlord or letting agency.
The amount you can charge will vary depending on your location, with London averaging the highest prices. The average of £708 per month compares to £392 per room in the North East. If you’re in a university city or town, then there will be demand from students during term time.
Along with the income, sharing your home can have other benefits, particularly if you’re self-employed and working alone for hours every day. And there may be someone in your network of family and friends to make the experience slightly less awkward to start with.
But whenever you’re thinking of letting a room in your home, it’s vital to have clear agreements and expectations in writing to make sure everyone is clear about their responsibilities. Even close family and friends can quickly fall out due to constant problems with rental payments, damage, or other issues.
Renting out your home
You don’t have to share your property for months at a time to make a significant amount from rentals. If you regularly work away from home, or want to make some additional income while you’re away on holiday, you could consider renting the entire space.
This can be lucrative if you live in a popular holiday destination. Or if there are big local sport events, festivals, or other attractions. And you could use it as a chance to visit family or friends, meaning that you earn even more from the rental.
The risks include theft or damage, so it’s important to check the contracts and terms for any service you use along with your insurance cover, to make sure any accidents don’t leave you out of pocket.
Before offering your home as a temporary rental, you may need to notify your local authority, or obtain licensing and permits for a short term let. Plus, check your mortgage, loan, and any contracts covering leases, building regulations or community rules.
As well as the extra income, letting out your home while you’re away will make it less of a target for burglars than a property that’s obviously empty.
If you want to save on holidays, you can also consider house swaps to cut the cost of accommodation.
Offering your home as a film set or photoshoot location
You don’t need to live in a mansion or luxury apartment for your home to be used as a television or film location, or for photoshoots. While more interesting properties can attract more interest, many characters in popular TV series will live in typically normal flats and houses.
While many film and TV agencies are based around London, there’s growing demand for locations across the UK. And if your property becomes the star of a long-running TV show or major movie, you might be able to factor that into the price if you decide to sell.
You shouldn’t expect to be hanging out with Hollywood stars when you offer your home as a film set, but it might happen. A big benefit is that you can charge a relatively high rate compared to room or property rental, varying from around £500 per day to more than £2,000.
This is in return for a film or TV crew taking over your home for a few days. They may also want to repaint it, change features to be period-specific, or reorganise things. Depending on what’s required, this may actually be a benefit, but all disruption and alterations should be factored into any agreement and fees you’re charging.
Renting your garage, driveway, or parking space
You don’t have to let strangers into your home to earn an additional income. If you have an empty garage, driveway or parking space, then you can earn money for nothing by listing it on sites including JustPark, Your Parking Space, or Park on my Drive.
There will be more demand if you’re in a big city, near a commuter train station, or if big sports or entertainment events are taking place nearby. And you may be able to get more for an EV Charger, if you have one installed.
You’ll need to inform your home insurance provider, and take any booking commission or listing fees into account. But with typical prices ranging from £6 to £13 per day, you could potentially earn a significant amount for relatively little effort.
Offer your garden as a micro-campsite
You don’t have to own a large piece of land to offer camping space for average fees of around £25 per night. Especially if you’re located near popular music or sports events, or in a particularly scenic part of the UK.
Investing in an outdoor toilet and shower will mean campers can look after themselves without needing to enter your home. And you’ll be able to charge a higher fee. But you can list your garden and set specific dates for free via listing sites including Camp Space, and judge demand before spending any money on providing better facilities.
You can also offer pitches for campervans, motorhomes, or caravans if you have suitable space and access. You’ll need to inform your home insurance provider, and having a commercial policy is encouraged, but not necessarily essential.
Alternatively, if you own your own motorhome or caravan, then you can also let that out rather than leaving it sitting on your drive. Services like Camplify or Camptoo suggest typical income from £515 to £750 per week.
Rent storage space in your home
Instead of offering rooms to lodgers, you could rent out space in your garage, loft, or spare room for storage instead. In addition to receiving around £20 per month for a small attic space or more than £100 for a larger and secure option, if a contract has ended with the belongings being collected, it’s possible you’ll be entitled to anything that has been left.
Most services, including Storemates or Stashbee, recommend that no-one uses them for valuable items, and they also have a list of things which are prohibited. The storage agreement will include an inventory, and you have the right to ask for an inspection before allowing anything onto your property. While this means you’re unlikely to come into the possession of valuable antiques, it will hopefully prevent any safety hazards or legal issues from offering storage space.
As always when you’re offering up your home, it’s important to check the terms and conditions of the service you use, and to inform your insurance provider.
Rent part of your home as an office
If you’re self-employed, there’s a good chance you’ve invested in the equipment and facilities to work from home. So, if you have enough space, why not let out part of your home as an office?
The benefit is that you’ll only be sharing with other people during set hours. And rather than paying for a co-working experience, you’ll be the one benefiting financially. Although you’ll need to take internet use and extra tea bags into account, along with checking your mortgage and insurance details.
But if you find working alone from home becomes lonely or isolating at times, it could be a great way to meet other people in similar careers. Along with earning potentially between £50 and £250 per day via sites including Office Riders.
If you’re considering any additional income stream, it’s important to ensure you’ve taken any legal and tax implications into account. IPSE members have access to tax and legal helplines, along with templates for contracts and agreements, a discounted contract review service and more.
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