So the kids have moved out, or you no longer have use for that home office now that you’ve landed another job, or maybe that second living space never gets used. Did you realise you are potentially sitting on a way to help pay off your mortgage quicker?
Thousands of households across Australia have spare rooms that could be bringing in some extra income which could pay for the grocery bill, the mortgage repayment or go towards to your next holiday.
Plenty of Aussies have already cottoned onto the idea of letting out their spare room, with accommodation websites such as airbnb.com filled with rooms available in regional and capital cities across the country. Many people also offer up their spare rooms / granny flats for foreign students.
As well as reaping the financial benefits (hello to a potential extra $200+ a week!), allowing people to stay in your home opens you up to meeting a variety of interesting people from all walks of life.
Some things to be aware of
Leasing a room within your home is quite different to leasing out an investment property. While both require trusting a stranger with your property, renting a room entails sharing your space and having to get along with the person.
You may have to put up with strange bathroom or kitchen behaviours (if you are sharing these facilities) and be tolerant if they happen to play an instrument or want to have people ‘sleep over’ in their room. However, it is your home, and by rights you should be able to establish a set of rules for living under your roof.
Your local council may require you to request permission to rent out a part of your property, so give them a call or check their website for more information before posting your spare room on a site like airbnb.com – some councils can issue a fine of up to $750 to homeowners they perceive to be breaking the law!
It may be harder to rent out a room if you live in an apartment block or duplex, where body corporate rules may prevent you from doing so, or may have specific requirements or rules you need to uphold.
Before leasing out a spare room
- Check with your local council if you need permission and apply for any permits necessary.
- Clean your belongings out of the room, and give it a good scrubbing.
- Decide what you are actually going to provide as a part of the deal – e.g. will the furniture stay? Will you provide bed linen and towels? How is sharing the bathroom going to work? Can they access the kitchen to do their own cooking? Or are you providing meals? If so, which ones? Are they sharing laundry facilities?
- Work out some other ground rules – do they have free rein to come and go at whatever times of the day or night? Can they have people over? Can they have a pet, or instruments, or bring their own furniture? Do they have to contribute to cooking and cleaning of the whole home?
- Decide on a nightly, weekly or monthly price for the room. Will you lease it out to tourists who wish to only stay for a few nights, or do you want a longer tenant such as a foreign student? Does the rent include bills, or will they be extra?
- Take photographs of the room itself, plus the kitchen, bathroom and laundry facilities.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker
Will Keall, iMortgage’s general manager, has a wealth of marketing and business development experience gained in Australia and the United Kingdom. These include high level roles in a range of sectors such as financial services, insurance, travel and tourism, motoring and professional services.
Will played a pivotal role in the successful establishment of iMortgage. His dedication and passion for the mortgage industry have won Will the utmost respect as an integral part of the iMortgage brand.
A self confessed “numbers and brand geek”, Will calls himself a conservative investor with a long-term philosophy. He also believes it’s important to “love where you live.”
Will is a cricket and football tragic, who also enjoys running.