With people looking for ways to gain extra revenue since the cost of living dramatically increased, there are some considering utilising the property they live in rather than taking on other jobs. Airbnb has risen in popularity since its inception in 2008 but it was not until it moved into the German market in 2011 that it took on a global expansion.
Since then, more people have taken to renting out rooms or entire homes, however before thinking how great this idea sounds, there are a few things to consider. There are certain rules within the UK when it comes to mortgages, renting and insurance.
Read on to see if you meet the criteria to be able to Airbnb your home and earn a little extra cash that may help you with future property plans.
Can I rent out a room on Airbnb?
Many of us do not own a second home so renting out a room is a great way to generate some extra revenue and give people a cheaper option than a hotel. Rules would normally stipulate that it must be a home and not one you are renting yourself. To generate sufficient interest, you are best off living in a place that draws in visitors as otherwise it could be a venture that never takes off. Also consider the fact that you will need to take care of extra housekeeping to keep your guests happy. If the property you live in is rented, it is unlikely you will be able to rent a room on Airbnb as letting agents or landlords are opposed to subletting.
Can I rent out my home on Airbnb?
This is a great way to earn yourself a decent extra income however there tend to be more restrictions around this. Airbnb will allow you to let out both a room or a property, but it is worth checking the details of your mortgage agreement first. As with the letting of rooms, you cannot offer your property when renting as in most contracts subletting is prohibited. You can always contact your landlord or letting agent for confirmation but the most common letting contracts would not allow it.
With regards to a property, you own and have a mortgage against, it is highly advisable to check with your lender. Some stipulate it simply isn’t allowed, others review on a case-by-case basis. With the providers that do allow you to let your whole property on Airbnb, you will often find that it is only allowed for a set number of weeks. There may also be a fee involved. Letting out for longer may mean you need to switch mortgages.
Checking the full terms of your mortgage is important whether renting out a room or the whole property as if you are found to break any rules you could find yourself penalised with worse rates or additional fees.
Does my home insurance cover Airbnb?
You may be keen to get your house or room listed on Airbnb to make some extra cash. Totally understandable, however along with checking with your mortgage provider or landlord, you need to check your insurance policy.
You will be letting strangers into your house and whilst you may have trust in their good intentions, there will no doubt be concerns over how your house is treated. You may find that you never have any trouble from any guests at all, however, if the insurer is unaware of your intentions to let out a room you could face penalties.
Failure to inform your insurance company could see you have your policy made invalid. Many insurers choose not to offer cover where the intention is to let your property via Airbnb as the thought that your property is more susceptible to theft or damage is increased. It may be advisable to seek out a specialist insurance provider or ask your current one if there are options to change your policy. Just be aware there will likely be extra costs.
How much money can I earn on Airbnb?
The government introduced a rent a room scheme a few years back now and for many it has been a godsend in securing some tax-free revenue. On the initial £7500 you earn from letting out your room or home (property must be furnished) you will not pay any tax. If you earn less than this then you do not need to do anything, if you earn more, then you must complete a tax return where tax will be calculated on the amount above £7500. For extra information regarding this government scheme, you can find out more here.
If you chose not to use the scheme, you can simply fill out a tax return and record all income and any expenditure. Depending on the figures this can sometimes earn you more money than the rent a room scheme. The expenses that are deductible are varied so we would recommend you check the list provided by the government to see what option may work our more beneficial for you.
How much can I rent my house on Airbnb?
To ensure you get the best price for your air BnB letting, you should compare hotels in your area. You don’t want to charge more than they do if letting out just one room, however, if letting out your whole house, then you probably could.
If you are located in an area that has seasonal peaks, then make sure your pricing reflects that. People expect prices to match demand. Just keep in mind that you could price yourself out of the market if you go too high.
Are there restrictions in the UK on renting out my home on Airbnb?
Yes, there are, in London for example, you can only rent your home out for a total of 90 nights. If the incentive of generating extra revenue is appealing to you and therefore wish to go beyond 90 nights, you will need to apply for planning permission to change the property’s use.
Are there any safety requirements for my house to be on Airbnb?
Fire safety is a key feature of any home, even more so if you have people temporarily staying in it. You will need to show a clearly marked fire escape route, provide the correct type of extinguishers, and have a risk assessment. Your local fire service should be able to guide you with these requirements. You will also need to make sure your EPC is in date and that heating is in good working order.
So, as long as you have checked with your mortgage provider or landlord, letting out your property on Airbnb is possible. Providing you have a location people desire, pricing that draws attention, be fully safety compliant and have the correct insurance, there isn’t much more you need to do.
Furnish it nicely, be a brilliant host and you could do well out of your property.
If you are looking for property for sale in order to expand your options then speak to our team at SOLD.CO.UK, we are an online estate agent that has a vast portfolio of properties. In addition, should you be thinking about selling a house we can help there too! We sell without charging you any fees and work quickly to ensure you can get moving.