a bit on the side
Living on me jack-jones means I often have a spare room going begging. Several months ago I offered its use to a homeless charity…only for it to be declined. WTF. How very dare they! So, I did what any self-respecting capitalist would do and explored the possibility of making some quick cash via Airbnb. Mind, as I was to find out, getting paid for your guest bedroom isn’t as straightforward as it sounds.
Renting out your property on a short-term letting basis may sound like an easy money-spinner but, in reality, you need to go in with your eyes, ears and wallet wide open. Before you even get close to having your door darkened there are tax, insurance and mortgage-lending issues to contend with. Not that these appear to have deterred too many of my fellow UK property owners who last year contributed to over two hundred thousand active Airbnb listings, netting them an annual average of £3,100 each.
However, this amount is taxable and you need to tell HMRC all about it. Several years ago you were legally allowed to earn a whopping tax-free £7,500 via the ‘rent-a-room’ scheme irrespective of whether or not you were in at the time, but the full amount is now available only to those who actually live permanently in the nominated property. Dedicated buy-to-Airbnb-let landlords are technically limited to only a grand.
That said, and done, if you’re mortgaged you then have to formally request the permission from your lender to do so, and there’s no obligation whatsoever for them to consent and agree. The newer banks and lenders seem a little more lenient (Metro allows you ninety days letting/year) and saver-savvy but the request has been known to backfire with ‘rental fees’ and/or increased interest rates being levied. Keep schtum and lying by omission is classed as mortgage fraud and ignorance wrt the long arm of the law is no defence. Find out at your peril. Needless to say, you’re also going to have to tell your insurance company and they’re not known for lowering premiums in such situations!
Once the sh*g & hassle of the all the administration is taken care of then there’s the small matter of designing your online presence, marketing the room, managing the booking process, selecting guests, communicating and confirming, ensuring payment is received and cleared, organising cleaning, changing bed linen and replacing what inevitably goes missing or gets broken. The good news is, if you don’t fancy doing it yourself, there are loads of companies that will do it for you but the bad news is they don’t come cheap! For a half-decent service bank on a minimum of 12% commission on your revenues but, in practice, it’s going to be closer to 20%.
Personally, though, for me it was the overriding feeling that someone, a stranger, would’ve been in my house, like a legitimate burglar, and had probably rooted through my smalls. There’s an infamous saying that ‘house-guests, like fish, start to stink after three days’. For whatever reasons, and feel free to call me small-minded and mean, none of them ever got over my threshold.
NB As a side note, Airbnb last month vowed to crack down on its rented properties being used as ‘party houses’ following a ‘Halloween party event’ mass shooting. Five people were killed and a suspect has yet to be identified. The company has stated it will create a ‘rapid response team’ (Ah, blood on the carpet? We would always recommend salt and white wine. A dismembered body in the bath? Cillit Bang does it for us!) and seek to remove properties that are subject to repeated noise complaints…
NNB. And just to show I’m (relatively) unbiased here’s a response from one of my squash pals, Peter R, whose claim to fame is that he kept a ‘clean-sheet’ (nothing to do with laundry) against a Manchester team that featured both Georgie Best and Dennis Law. No really. He’s also a big fan of Airbnb:
“From the other perspective: After we travelled for a year in 2013/14 and discovered airbnb, which we really enjoyed, we decided that we would rent out our guest bedroom using them. It was easy to set up the web site, no more than two hours’ work and insurance was straight forward. We never let out the room unless we are “in residence” and our intention is just to enjoy the experience so we are very choosy who we accept. We are always full for Royal Ascot, £120 per night and about 10 nights, £70, during the rest of the year. We do it as a hobby so people stay on our terms, minimum 2 nights stay to make washing and ironing etc worth while and only in the summer so we can sit out and get to know people.
We have met some wonderful people from an author writing Stephen Hendry’s biography, a couple from Paris cycling around England to an opera singer from Australia who shared a G&T or three with us in the garden before giving a rendition of Tosca!
Tax is no problem – just declare it. Commission is minimal, Airbnb take 3% from the host, much more from the guest.
The way we do it we feel in full control and use it as a purely social experience, we are fortunate enough not to need the money nor to have to run it as a business upon which we rely. We’d recommend it to anyone.”