Enterprising homeowners can earn hundreds of pounds a week by letting a room – or their whole home – to guests during a major cultural or sporting event such as Henley Royal Regatta or the Edinburgh Festival
More and more people are making extra money from their property by renting it out for short but lucrative stints, often by leaving their home for the duration of a tournament or festival and heading off to stay with friends and family.
The amount you can get depends on factors such as the condition and size of your property, as well as the location. Findings from TripAdvisor Rentals showed that last summer the average price per night for a one-bedroom property in Edinburgh during the Festival and Fringe was £129.33, while in Stamford, Lincolnshire during the Burghley Horse Trials it was £97.06.
Separate figures from events and accommodation booking site EventfulStays.com show that last year, during the Henley Royal Regatta, a four-bedroom house was being let at £460 a night, while in Silverstone, in Northamptonshire, during the Grand Prix, a similarly sized property was being let at £650.
Findings from holiday rental site Airbnb showed that last year, Stamford, in Lincolnshire, saw a 107% increase in bookings for the Burghley Horse Trials, while the areas around Silverstone drew 86% more visitors than usual for the Grand Prix.
James McClure, UK general manager for Airbnb, says: “Major cultural and sporting events across the country mean an influx of visitors from both near and far, many of whom will need a place to stay for the duration of the event. By listing your home, you can help to meet this demand and get the opportunity to earn some extra cash while meeting new and interesting people from across the globe.”
Take advantage of tax breaks
If you are thinking about taking in guests this summer, the good news is, you can earn up to £7,500 tax-free under the government’s Rent-a-Room scheme.
Sarah Ghaffari, tax manager at the Institute of Chartered Accountants in England and Wales, explains: “The Rent-a-Room scheme is a tax break that allows homeowners to enjoy up to £7,500 of tax-free earnings from renting out a spare room. The scheme is available for all homeowners who let out a furnished room in their main residence. Major sporting and music events are perfect opportunities to participate.”
Income earned above the limit will need to be included on a self-assessment tax return form.
"You can earn up to £7,500 tax free from renting out a room"
Tim Walford-Fitzgerald, private client partner at accountant HW Fisher & Company, says: “Should the rental income you receive exceed the £7,500 allowance, you will be liable for income tax in the normal way – and you will need to declare it.”
For more information, visit Gov.uk/rent-room-in-your-home/the-rent-a-room-scheme.
There is another tax break which operates alongside this scheme, a £1,000 allowance for property income. Miss Ghaffari says: “Provided the property income earned does not exceed £1,000, it does not need to be declared, and there is no tax due.”
Note though, that while the £1,000 property allowance is in addition to Rent-a-Room relief, it can only be used on income which does not qualify for Rent-a-Room. In other words, you can’t claim both unless you are earning from a separate source of property-related income.
Miss Ghaffari adds: “If, for example, you earn £10,000 renting a spare room, you would get the £7,500 Rent-a-Room relief. You would only get the £1,000 property relief if, say, you let out your driveway or rented out your dining room as an office space.”
Summer events to cash in on
- Henley Royal Regatta 4-8 July
- British Grand Prix, Silverstone 6-8 July
- Edinburgh Festival and Fringe 3-27 August
- Cowes Week, Isle of Wight 4-11 August
- Reading and Leeds Festivals 24-26 August
- Burghley Horse Trials, Stamford, Lincolnshire 30 August-2 September
How to price and market your property
If you are thinking of opening your home up to guests, you need to be realistic about how much you can charge. The best approach is to check how much other people are charging for similar properties in your area.
When it comes to marketing your property, the cheapest option is to list your home on a social media site, such as Facebook and Twitter – as these are free.
Alternatively, with Airbnb, you get the freedom to set your own price and organise everything yourself, but hosts face a 3% charge on bookings taken. Other sites that are worth a look include TripAdvisorRentals.co.uk and Eventfulstays.com. But remember to check for charges and VAT.
Also check whether you can earn cashback when you list your property. TopCashback.co.uk, for example, pays £78.75 cashback when you list your property on Airbnb via the TopCashback website, after you have successfully completed one booking.
Tips for a successful holiday let
Whichever route you choose, you need to provide as much information as possible to guests – about both the property and the surrounding area.
TripAdvisor spokesperson Laurel Greatrix says: “Your listing is the ultimate marketing tool for your property, so take advantage of all of its features. Have your listing tell a story: what’s distinct about your holiday let? What features will guests love? Keep your target audience in mind; for example, if your property is great for families, focus on details such as the number of bedrooms and the amount of space. Also highlight the general appeal of the location.”
Remember to provide information such as whether there is a cot and whether pets are allowed.
You also need to take good photos to show off your home at its best.
If your home is in easy travelling distance of a major music festival, Wimbledon tennis tournament or Burghley Horse Trials, you could make a significant profit renting out a room
Ms Greatrix explains: “A detailed listing is key, but ultimately your photos are the first thing to catch someone’s eye. Aim for eye-catching, well-lit and high-resolution images that capture the interior, exterior and surrounding area.”
Don’t skimp on the number of images, too. She adds: “Our data shows that rentals are six times more likely to be booked if they have more than 20 photos.”
Once your listing is live, make sure you respond to any booking enquiries as soon as possible.
Ms Greatrix adds: “It’s important to stay on top of guest communications. You are nearly three times more likely to receive bookings if you respond within one or two hours of the enquiry. During the stay, make sure guests have your contact information.”
After checkout, follow up and ask guests to review their experience.
Inform your mortgage lender and insurer
Before opening up your home to guests, renters should ask permission from their landlords, while those with a mortgage must speak to their lender first, to ensure they aren’t breaching their terms.
Sam Mitchell, chief executive of online agent HouseSimple.com, says: “It’s unlikely a lender will refuse to allow a short-term let, but you need to check to ensure you stay within the Ts & Cs.”
If you’re a leaseholder, you’ll need to speak to your freeholder as well.
"You are six times likelier to be booked if you have over 20 photos"
You also need to check with your insurer before letting any part of your home – even on a short-term basis. Fail to do this and you could invalidate your home cover.
As most insurers don’t cover people who are letting out rooms, or their entire homes, as standard, your provider may charge an extra premium to do so, or may refuse altogether.
You could consider arranging specialist insurance for renting out your home as a holiday let. Try a broker, such as HomeProtect.co.uk or Towergate.co.uk, or the British Insurance Brokers’ Association (Biba.org.uk).
When thinking about insurance, consider paying for some extra liability cover, which will protect you against accidents and injuries when someone is staying in your home.
Fringe benefits in Edinburgh
Victoria Tweedie (pictured above) rented out her four-bedroom flat in Edinburgh’s historic New Town during the Edinburgh Festival and Fringe last summer, and made £7,250 during the month-long event. She is renting it out again next month during this year’s festival.
The 43-year-old, who works for a charity, splits her time between Edinburgh and the Scottish Borders. She lives in Edinburgh during the week, and then rents her home (Edinburghholidaypad on Instagram) to guests at weekends and when she’s on holiday – including for the duration of the festival.
Victoria signed up to Airbnb last year and uses Airsorted – a management service for Airbnb hosts – to help with the lettings process.
“When I first signed up to Airsorted, it took the photos, wrote the blurb and took care of everything for me,” says Victoria. “Airsorted now manages all the bookings, as well as the cleaning and changeovers, and this is particularly helpful during the festival when things get really busy.”
Victoria usually charges between £220 and £320 a night for her flat, which can sleep seven people – but can get as much as £450 a night during the festival.
“I insist on a minimum stay of two nights, but many guests stay for a week – or several weeks – especially during the festival,” says Victoria. “I get all sorts of guests, and even had a comedian for two weeks last summer.”
Victoria arranged her holiday lettings insurance through Airsorted, and gets the host protection insurance that’s offered by Airbnb, which provides liability coverage.
“All the guests are carefully vetted by Airsorted and have to have gone through the Airbnb verification process,” she adds.
“They are also asked a lot of questions.
This makes me feel reassured about letting my home to strangers. To date, I’ve not had any bad experiences at all. I provide guests with lots of information and a lovely, welcoming place to stay, and people seem to respect that.”