Many homeowners are planning on cashing in on the 2012 Olympics, by renting out their homes for the period. A four bedroom house in Muswell Hill is currently on offer for £3,500 per week during the Olympics. With this sort of cash incentive, it is easy to see the appeal.
However, making a quick buck is never going to be that easy, and there are a few things to consider before becoming an Olympic home hotelier.
Statutory safety regulations are just that, and letting a property without a valid Gas Safety Record in a criminal offence, punishable by a custodial sentence. There are also electrical safety regulations and fire and furnishing regulations. For example, upholstered furniture manufactured between 1950 and 1994 must be removed from the property.
You should also consider the risk of damage to your property and its contents. Although you will most probably take a deposit, it may not be sufficient to cover your losses. It is also important to consider the emotional cost of renting your home. If something gets damaged, broken, or stolen, it may be more than just a financial loss to you.
There will be a requirement to manage the tenancy. You will need to check the tenant in and out. They may need help to work the heating or hot water, the tumble drier might break down, or a lighting circuit might trip the fuse. In other cases, it may be that the tenant is coming from overseas, and the cultural differences cause problems. Whatever happens, you as the landlord have to be prepared to deal with it, even if it means attending the property at inconvenient hours. Remember that tenants are paying inflated rent for the convenience of staying in your house, and as such, they are entitled to have any issues resolved quickly and efficiently. You may want to consider staying close by so you need to be on hand to deal with any issues as they arise.
It is also important to let your insurer and Mortgage Company know that you are renting your property, even if for a short time. Landlord’s insurance is different to household insurance, and you will not be covered if you have not informed them. Direct Line and Aviva are amongst a host of insurers offering temporary home insurance cover. Your Mortgage may not allow you to let your property, or may wish to have further information.
You must remove any valuables, and consider also removing photos, clothing and shoes, in order to give the tenant a house free of personal effects.
Remember also that the money you make from renting your home is taxable, and should be declared on your income tax return. Contact an accountant for more information about what will qualify for relief (alternative accommodation, redecoration, advertising, legal and financial advice etc).
Renting a room in your house may be a simpler option. You will be more in control of the tenancy, and will also be on hand to deal with any issues directly. There are tax benefits too, as the Rent a Room Relief means that the first £4350 of income is tax free (although this is not the case if you are providing personal services, such as cooked dinners to the resident, as this would be deemed to be running a business).