Struggling to pay your mortgage ? Rent a room out and generate income

Saturday, 25 October 2008

 

We are going through tough times and many homes are being reposessed at a rate that is matching the nineties property crash. You may want to consider like many to rent out your home or rent out a room, Letting rooms in your home can be a useful way to generate income

Letting rooms in your home (View our property letting section)

A home owner in Gloucester became a landlady and tenant at the same time. She says:

I’d lived in my three-storey end-of-terraced home just outside Gloucester for about five years.

I already knew the market was poor but needed to sell because I wanted to cut down on the laborious drive from my home to work, plus my daughter was looking for a specific school in the Cheltenham area to continue her A-levels. I placed my house on the market in March for £210,000 but in three months I didn’t get a single viewing. In May I dropped the price to £180,000 but still didn't have any luck. By late June I was starting to panic as my daughter had since been offered a place at an excellent school. It was then I decided to become a landlady and rent it out.

I placed it on the market and soon had a six-month tenancy agreement with a lovely young family, giving me a rental income of £750 per month which covered my mortgage.

The only downside is that, ideally, I’d love to buy – and not selling means that for now I too have to rent.

But at least I’m nearer to work and my daughter’s within easier reach of her new school. My rented flat costs £550 per month so financially we’re OK.

But what do you need to know if you are thinking of letting?

Tenancy agreements

Most lets are assured shorthold tenancy agreements which protect the landlord’s possession rights after a fixed period while the tenant is similarly protected against being evicted.

And the same rules apply for letting as for selling…location, presentation and price.

You don’t need an agent to let your property or a room to tenants, you will be charged between 10 per cent and 15 per cent of what you get in rent each month. View our property letting section for all types of agreements

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