13 ways to make extra money from your home
As the cost of living crisis bites, it makes sense to see if your home can pay for itself, or at least contribute to rising costs. Consider your bricks and mortar (and outdoor space) assets as potential sources of 'passive income' which can generate funds without you having to do very much. Thanks to technology – and innovative thinking – there are lots of new ways to make this work, from turning the garden into allotments to renting out your EV charging point. Here are 11 ways to help you earn money from your home – what are you waiting for?
1. Spare bedroom
Renting out a room means that lodgers benefit from an affordable place to stay, often on a Monday to Friday basis, and householders can earn up £7,500 a year tax-free, or half that amount if you plan on splitting the income with someone else. It's open to both homeowners and secure tenants; you will need to check the details of your tenancy agreement.
The amount you can ask for from a lodger depends on the size of the room, facilities and location – cities tend to be more expensive than rural areas. Look on websites such as SpareRoom.co.uk , Roombuddy.co.uk and MondaytoFriday.com to get an idea of rates in your area.
'As a general idea, it is estimated that the current average for a double room in the UK is £90 a week,' says Kellie Steed, mortgage expert at money.co.uk. 'As well as charging for rent, you could also charge your lodger for council tax, utility bills, and even cleaning and food if provided.'
For more information, visit gov.uk.
If you don’t fancy a full-time lodger, you may want to try short-term letting websites such as Airbnb or Vrbo . The UK is one of the most popular Airbnb locations in the world, third-highest (after the USA and Australia), with York the most lucrative UK city, where average annual host earnings for 2021 are £30,569.28.
You can let out just one room – or your entire property – to holidaymakers for potentially hundreds of pounds a night. If you go down this road, speak to a tax adviser, as often the tax situation isn't as clear-cut as letting out your property long-term.
3. Host international students
Becoming a host for an international boarding school pupil or student is another alternative if you're able to rent out a room and can offer ongoing parental-type support to a young person. The bonus is that if you go through an organisation such as UK Guardians, your overseas house guest will have been carefully vetted and checked.
'Registering your property and willingness to offer support is the first port of call when looking to monetise your available space,' says Bernard Darko, CEO and founder of Kind Room, a website which matches people with particular skills to homeowners in exchange for reduced-price rent. 'If you can provide "extras" like an en-suite or tailored dietary provision, then you could be looking at an even more lucrative deal, all while helping a young person achieve their dreams.' Earnings would be negotiable, but in a similar ball-park to taking in a lodger.
4. Storage space
Your cellar, loft or garage space could be used by people looking for storage. Potential earnings vary depending on location and the amount of storage space available. According to stashbee.com, average annual earnings for a 'storage host' on the Isle of Dogs, east London – as an example – could potentially earn £2,352 a year. In the suburb of Crookes, Sheffield, south Yorkshire, this would be £1,632. 'Storage guests' are subject to ID checks, and belongings are insured.
5. Workspace and equipment
If you're back working in an office, or only home part of the week, other people could rent space at your home to work, study or hold meetings. This might be your home office, garden room or dining table. Check out day rental specialists Office Riders. As an example, a typical 40 sqm one-bedroomed apartment in Edinburgh, Scotland could bring in £312 a month if you allowed four people to use it every day.
You could also organise this by advertising on local online marketplaces, such as Facebook and Gumtree, setting your own prices and time frames.
If your kitchen is quiet during the day, take advantage of the explosion in food start-ups and private catering, both enjoying a post-Covid resurgence. Kitchen2Rent matches available, well-appointed domestic and industrial production kitchens with those who need a place to create.
7. Camping in the garden
Guests might pay to camp in your garden! Everyone's loving the great outdoors these days, and Campspace administers more than 1,000 micro-campsites across the globe, including pitches, yurts and shepherd's huts. Typical rates range from around £12 per person for a back garden pitch in West Wales, for example, to around £50 for a luxury provided tent in the same location.
8. Rent your garden as allotments
Here's a double whammy; if you have a large garden, reduce the time and money spent on garden maintenance and earn extra income at the same time, by transforming this space into allotments. Depending on the size of the area and where you're based in the UK, you could charge up to £120 per year for each allotment. Most allotment owners would advertise this locally, through word of mouth and social media.
'If you are interested in starting an allotment area, it's important that you have external access to your garden available, so that people can gain access to their allotment even when you're not in,' says Louise Bastock, editor at personal finance comparison site finder.com. 'Additionally, it's important to ensure that the allotment area is securely gated off for your own peace of mind, especially if you have pets or children.'
9. Rent out the driveway or private parking space
Don't forget your driveway or private parking space, especially if you live near a station, airport or event/sporting venue. It's so easy to advertise parking for rent on a website such as justpark.com or yourparkingspace.co.uk.
'JustPark claims that their top hosts make over £4,000 per year just through renting their driveways, with the first £1,000 being completely tax-free,' says Louise Bastock. 'If you live near an in-demand place, it's definitely worth researching whether your car parking space would be eligible for renting.'
10. Rent your home to film & TV companies
Is the décor of your home truly spectacular, or even a little unusual? If you think your home has character and the potential to be on the big screen, then consider signing up with a film locations agency.
'You can register your home with agencies such as Shoot Factory and be in with a chance of having your home chosen to be the location for a TV show, film or photoshoot,' says Abigail Yearley, spokesperson for Top Cashback. 'These types of companies offer anywhere from £500 to £2,000 to use your house for the day.'
You could earn thousands of pounds by allowing a film crew into your home – see how homeowner Sommer Pyne fared when her house became the set of BBC's crime drama McMafia.
11. Your car
If your car sits on your driveway all day, consider peer-to-peer car sharing – letting other people pay to use it. Companies such as Turo and Hiya Car subject all borrowers and lenders to rigorous checks, as well as also providing insurance and breakdown cover.
12. Your EV charge point
'If you have an EV charging point on your drive then you can make some money from this by letting local people and commuters use it for a set fee,' suggests Nick Woodward, lettings director at property development company Essential Living. How much you charge (excuse the pun) will depend on your own tariff and if the cost of energy varies during the day and night.
13. Pet sitting (and renting out your own home)
Offering your home and/or garden for dog sitting services is an easy – and fun – way to earn an additional income, especially if you work from home or there are set days during the week where you are off work. You are advised to take out insurance to protect yourself and your property.
Or even, if you're comfortable with pets and happy to rent out your own property whilst you pet-sit for other homeowners, you could take a trip anywhere in the world – and let your own house to earn money whilst you’re gone. Short trips could be covered by Airbnb, and longer adventures through a more formal tenancy, like Trusted Housesitters, which connects pet owners and verified house sitters globally. Once you pay an initial fee (from £99 annually) to subscribe, and are checked, you can pack your bags and house-sit for an unlimited amount of homes worldwide for the rest of the year at absolutely no cost.
Before you embark, check the tax and legal side. If you use your home to generate a substantial amount of income, you’ll need to inform Her Majesty’s Revenue & Customs (HMRC) as well as your mortgage company, landlord and insurance provider. For more information, go to gov.uk and search 'tax'.
If you take a lodger or rent out your home in any other way, the tax exemption is automatic if you earn under the £7,500 threshold. If your rental income is over that amount, you'll have to complete a tax return.
'When renting out spare space such as a parking space on your driveway or a garage for storage, the £7,500 tax-free threshold does not apply,' explains Tim Walford-Fitzgerald, partner at accountancy firm HW Fisher. 'In such cases, an individual can receive up to £1,000 a year tax free under the property allowance. Staying below the £1,000 limit means a tax return does not even need to be filed.'
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