In order to climb up the property ladder, renting out a room in your house can benefit you in many ways. Firstly it will make it easy for you to pay off the mortgage or if you own the property then it’s just extra income in your hand. Many people have taken in a lodger and fell that it was the right decision for them. For those who like company of other people, this is an ideal situation, while others might think of it as invading their privacy.

One of the most surprising factors is that the income you get from renting out your property is mostly tax free. The government has introduced a rent-a-room scheme. In this scheme the government has set an approximate amount, any rent below this is free from any kind of tax. This scheme allows you to rent a room, an entire floor or a part of your property. Even tenants can take advantage of this scheme, provided that they have taken permission from their landlord.

There are many ways in which you can rent out a room and gain the financial benefit

Seasonal lodgers
If you don’t like to share your home on a daily basis you can still take advantage of this scheme by renting out a room on important events. For example people in Edinburgh charge high rates of rent during the festival season in august. Hence this allows you to share the house for only a week, a couple of days etc. Importantly the tax threshold applies to this as well.

Monday to Friday lodgers
There are a number of people who have their work or universities far away from their homes. The commute can be tiring as well as expensive. Hence many people rent a room for weekdays and on weekends visit their homes. So if you have a spare room in your house, renting it out on weekdays, tax free, is a pretty good option.

Choosing the right lodger
Before handling the keys to the lodger you must take steps to ensure that he is suitable for you. For this purpose you should ask him to provide you with references from his employer, bank, previous landlord. Also check for his criminal record. You should ask him about his like and dislikes, the amount of time he will be spending in the house. You must explain him the house rules. Make sure that the agreement is in writing, outlining the lodger’s duties and responsibilities, amount of rent etc.

Kate Forbes is a marketing officer for Greenlet, property lettings website in Edinburgh. If you want more information on edinburgh flats for rent, please visit accommodation edinburgh.