Talk

Advanced search

Charging rent to friend

(53 Posts)
Deadsouls Sat 14-Jan-17 13:47:44

I'm not sure if this is a WWYD. But couldn't find the relevant section.

I have a house in London (zone 4), and am renting out the double room to a lodger. The lodger is a friend who wanted to move to london.
She's a student and in a moment of feeling generous, (or codependent) ended up charging her £360 per month inc. bills. This was because it was what she could afford.

Anyway 6 months down the line - I'm suspecting that I'm undercharging for the room. Another reason I charged less is because I'm a single mum and live with my 2 kids (9 and 6), so it's a family home and the kids wake up early, can be noisy etc. So I thought this would mean that the house would not be an attractive prospect and I'd have to charge less to compensate for house, early waking etc.

Now I'm thinking I will have to broach the subject of raising rent with the lodger. She knows I'm helping her out. She said when she earns more, she'd pay more but that doesnt look like that's happening anytime soon.

I found out from 22 year old niece that she pays £480 per month plus bills for a smaller room.

At the moment I feel I'm taking more care of the lodger's needs than my own.
WWYD

milkjetmum Sat 14-Jan-17 13:51:56

There is a threshold above which you'll have to pay tax on rental income (80 ish a week?), so I would weigh up benefits of extra money pita of doing tax returns and possibly losing a lodger.

Maybe make bills separate?

ChippingInLovesWoollyHugs Sat 14-Jan-17 13:54:44

I'm (sadly) no longer in touch with what is reasonable in London. My God daughter pays £600 for a single room, all bills, in Clapham. She flat shares with 3 others. If it goes up again, they're moving,

If I were you, I'd look on the net as if you were looking for a lodging room. Just see what's out there in a comparable area & living arrangement.

Deadsouls Sat 14-Jan-17 13:55:31

Thank you I didn't realise that. It does work out at £81 pcm. But I'm guessing I'd only pay tax on amount over than that. I'm not averse to do a tax return!

milkjetmum Sat 14-Jan-17 13:56:36

Ooh I see the lodger allowance before tax is 7500 a year now, that might change your decision

AnnieAnoniMouse Sat 14-Jan-17 13:56:50

Just keep rent & bills separate then you won't need to worry about the tax.

Deadsouls Sat 14-Jan-17 14:02:45

Oh yes it is £7500

Deadsouls Sat 14-Jan-17 14:03:43

Re: bills. This would be a good idea but we are 3 and she is 1. I thought all in would be easier and less faffing about.

Deadsouls Sat 14-Jan-17 14:04:41

What about the compensation for noisy children who wake early? As in charging less cause of that. Do you think that's a factor?
I don't mind charging a bit less...but I think I'm charging a whole lot less.

mum2be88 Sat 14-Jan-17 14:23:42

If you weren't renting the room to her, would you be renting it to someone else? If not, then I would see it as being £360 per month better off!

AnnieAnoniMouse Sat 14-Jan-17 14:28:49

See if you get near the £7500, if you don't, don't worry about it. If you do then a fixed rate of £x for Rent & £y for bills is fine. Don't make it more complicated.

Yes, you need to take all factors into it - room size, use of the rest of the house (sitting room/garden/storage in loft/garage), use of facilities (such as washing machine) and other factors (i.e. Children).

Deadsouls Sat 14-Jan-17 14:32:25

Yes I would be renting that room out, as I need to financially. So if it wasn't her, it'd be someone else.

Yes, she has full use of the house. Washing machine etc, garden everything.
It's just the noise/children factor that I'm not sure about.

Optimist1 Sat 14-Jan-17 14:40:58

If you put her rent up would she move out? How long would it take you to find a new lodger (no rent coming in until you do)? Would you be willing to get your kids to modify their behaviour for the new lodger? Just a few of the questions that make me think you're better off having your current lodger.

She's someone you know and trust with your children and belongings, your family can make a bit of noise/mess without it being an issue and presumably she's reliable in terms of paying her rent. I'd be sticking with her, personally.

expatinscotland Sat 14-Jan-17 14:42:55

I'd stick with the devil I know, tbh.

Deadsouls Sat 14-Jan-17 14:44:18

Yes there there are all those factors. However, at the beginning of the tenancy, she did say that once she started earning more she'd pay more. As she knew that I was helping her out by charging so little.
Therefore, she knows that a talk about rent increase is on the horizon. I did say that I'd talk to her if that became an issue. I don't think she'd move out.
I'm not talking huge rent increase, more in line with normal room rent in london. Possibly a little less.

Deadsouls Sat 14-Jan-17 14:45:15

But yes I need to think about all these factors I guess.

MudCity Sat 14-Jan-17 14:47:23

As previous poster said. If she is reliable, no trouble, helpful and quiet, then I would stick with her. Especially if she is likely to be long-term....saves you having the hassle of renting to different people, some of whom you may not like or who might be noisy / want people to stay etc.

Finding someone you like and trust to rent a room isn't easy, especially with two children.

AnnieAnoniMouse Sat 14-Jan-17 14:49:05

Have you looked at what else is available in your area yet? There's nothing to 'think about' until you know what the market rate is for a lodger, sharing with a young family & having those facilities.

Letmesleepalready Sat 14-Jan-17 14:49:34

I'm not sure you are allowed to up the rent before the year is up, I know our landlords are only allowed to up the rent once every 12 months. And even then it's only upped by a government index (inflation rates or something)

But not sure if lodgers have the same rules. Hopefully for her, they do.

The landlord also has to give us a month or two notice of rent changes.

Deadsouls Sat 14-Jan-17 14:52:15

Yes letmesleep this is not something I'd spring on her by any means. I am reasonable and would give notice.

INeedNewShoes Sat 14-Jan-17 14:53:26

That's a tiny amount of rent even allowing for a bit of a discount for being a friend and your house having noisy kids in it.

I paid £365 pcm rent and bills in 2005!

Look on the spareroom website to see what the typical rent for a room is in your area. I'd imagine it'll be quite a bit more. You should easily be able to find a compromise of an amount that is still less than the going rate and factors in the kids/that she's your friend but means you get a bit nearer the market rate. It'll still be a fab deal for your friend and more affordable than if she tries to find her own place.

Letmesleepalready Sat 14-Jan-17 14:54:14

How long is she studying for? Her income isn't really going to go up until she's finished her course. Or has she finished now and is in work?

TimTamTerrier Sat 14-Jan-17 14:54:27

I think, considering that you have small children in the house, that there is a lot to be said for getting less rent but knowing who is living in your house with you. If you charge market rate and she can't afford it then you might end up having a stranger as a lodger.

iMatter Sat 14-Jan-17 14:56:22

Hmm, tricky. You need to be careful you don't force her out by putting her rent up.

I think you have to factor in the fact that she's a mate and has settled in with your family.

Your next lodger might pay more but might be a PITA and not someone you enjoy living with.

Deadsouls Sat 14-Jan-17 14:57:10

A quick look at my area for double room in house. One comparable family home £500pcm (inc bills).

For double room in houseshare it looks like anything from £550-£700

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now