Turn your spare room into cash

7 November 2012

The number of cash-strapped Britons who have taken in lodgers to help them pay spiralling bills has doubled over the past year, according to insurer LV=. Almost a million homeowners now let their spare rooms in order to pay their mortgage, debts and other bills.

Renting out a room can be very profitable. Under the government's rent-a-room scheme homeowners can earn up to £4,250 a year tax-free and with rents averaging at £400 a month, according to LV='s research, a lodger can go a long way in helping to ease your family finances.

But however much you need the cash, having a stranger in your home isn't always easy so follow our tips for finding a lodger you can live with.

Find your perfect lodger

1. While you might be happy sharing your kitchen mid-week you won't necessarily want somebody around all the time.

Fortunately, as more people are forced into longer commutes an increasing number of lodgers are only seeking accommodation during the working week. To advertise your space to part-time lodgers check out sites such as fivenights.com and mondaytofriday.com.

2. If you don't fancy matching yourself up with somebody online you can go for word of mouth recommendations by letting friends, family and work colleagues know you have space to spare. You can also advertise your room locally in shop windows or in the local press.

3. To ensure the agreement works for both of you always vet your lodger first - ask for personal, work and credit references. When you meet up with potential roomies it's also worth discussing your lifestyles - find out how much time they'll be spending at home, what the expectations are surrounding food, bills, cleaning and so on.

4. Draw up an agreement before your lodger moves in detailing the rent, when it is due, the length of the letting period, how you will share the bills and any other services you may or may not provide.

5. Sometimes having a lodger isn't just about money - you might want to help somebody who is struggling to find affordable accommodation.

Social enterprise Room for Tea (roomfortea.org), connects London homeowners with space to spare with young interns who cannot afford the capital's sky-high rents. Room for Tea suggests a rent of £350 a month but some lodgers pay less in return for helping out the host with anything from cooking to gardening or childcare.

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