If you rent your home, there may be a time when it suits you to sublet.
Perhaps you’re planning a round-the-world working holiday but want to keep your much-loved flat or house to return to when you get back.
Maybe you’re moving in with the love of your life but want to keep your options open . . . just in case they turn out to have some, erm, questionable domestic habits.
Or maybe you realise you’ve more than enough space and would like to rent out part of your home to earn some extra cash.
Whatever the reason, there are a few things to keep in mind when thinking about subletting.
First, before you get too carried away with the idea, dig out your tenancy agreement from that overstuffed drawer in the kitchen, and check what is says about subletting. Most will state explicitly whether you have the right to sublet all or part of the property and whether you must seek permission from your landlord.
If it’s all systems go with regards your tenancy, hurrah! But now there are some other factors that will affect your decision.
If you currently receive any benefits or tax credits, the additional income from subletting may alter your entitlement.
An adviser at Citizens Advice can run the calculations for you and see what’s the better option for you financially – they won’t even charge you to do this.
Another thing to keep in mind is potential changes to council tax. If you live alone, you’ll enjoy a 25% single occupancy reduction on the total amount. If you have someone else living in the property, you’ll lose this reduction unless the new tenant is exempt from paying council tax – for example, if they’re a full-time student (oh, and if they are, you might want to put a time limit on their daytime telly watching).
Regarding income tax, the government’s Rent a Room scheme lets you earn up to £7,500 a year from letting out a furnished area or room of your home. This is halved, if you share the income with your partner or someone else.
Remember to let the provider of your contents insurance know about any changes to circumstances. This may result in a rise in premiums so, check first.
You will also have to make sure the furniture in the sublet areas is in reasonable repair and meets health and safety regulations. No wonky chairs or shoogly beds.
As many people sublet to someone they know already it can be tempting to forget about formalities but it’s always important to draw up a written agreement and have both parties sign it.
Pulling together a quick inventory wouldn’t do any harm either.
Subletting can be a great way to keep on a rental you’re happy with, while freeing you up in the short-term or provide a little extra income.
Done properly, it’s a win-win situation – just like finding your dream home and the perfect place to rent and sublet on s1homes.