So you've decided to take in a lodger? Here's our step by step guide to help you work your way through the process with minimal fuss and make sure you've thought of everything. Points marked with an asterisk (*) are absolutey essential and you shouldn't ignore any of these. Those with the 'recommend' symbol (R) we would strongly advise you to consider.
- Check with your mortgage lender, landlord or local authority (if you're in a local authority owned property) to make sure you can legally take in a lodger. Unless you own your property and the freehold it's always best to check that you're OK to get a lodger to save any surprises later on.*
- If you own your property check with your mortgage lender
- If you rent from a landlord check your tenancy agreement
- If you're a local authority tenant check with your local authority
- Inform your insurance provider to make sure you're still covered and so you can let your lodger know if they'll need their own insurance *
- Inform your local benefits agency if you receive any benefits. It's almost certain any benefits will be affected by your taking in a lodger so find out in advance what the result will be *
- Get the room ready. Make sure you have all the furniture you need and everything is ready for a lodger. Remember, if you're going to use the Rent a Room scheme to earn tax free income you'll need to provide a furnished room
- Get your gas appliances checked by someone on the Gas Safe Register. It's a legal requirement to have a gas safety check done every 12 months - for more information go to the Gas Safe Register website.*
- Decide in advance what the terms and conditions will be. It may seem unnecessary at first but will avoid most nasty problems before they occur and give you a clear point of reference if you run into any difficulties (R)
- Get a contract sorted in advance so you're both covered (R)
- Check local rents so you're setting a fair rent for what you're offering. There's no point in overpricing your room and struggling to find a lodger. Try www.spareroom.co.uk to see what other people are asking (R)
- Advertise your room. Go to SpareRoom.co.uk and place your listing. Don't forget to check the 'room wanted' ads in your area and sign up for alerts so you'll be aware of anyone looking for a room in your area. For advice on effective advertising see Advertising your room (R)
- Credit checks. Once you've found a prospective lodger you may want to use a credit checking facility to make sure they're OK. Not everyone does this with lodgers but there are plenty of services available should you wish to
- Sign contracts and agree terms and conditions. Setting our the details of who is responsible for what in advance is highly advisable to avoid any later problems (R)
- Get your lodger to set up a standing order for the rent. This takes the personal element out of collecting the rent and means you can both budget more easily (R)
- Lodger moves in. It's a good idea to be available for your lodger on the day they move in. Don't just give them a key and go out. They're bound to have questions on the first day so make it easier for them to move in and feel settled. Don't stand around and watch them unpack but make sure they know your door is open if they need you (R)
- Inform your tax office if you earn over £4,250 per year from your lodger. If you fill out a tax return anyway make sure you include the income *