Get it on the mortgage
First of all, before you buy make sure you choose a mortgage provider who allows you to have a lodger. You’d be surprised how many providers add clauses to their agreements preventing this. Tell them your plans for renting out a room upfront, after all you don’t want to the mortgage to be turned down at a later stage, potentially meaning you lose the property.
Think about the tax implications
You’re allowed to receive £4,250 tax free from renting out a furnished room in your property. Anything over this and you’ll need to declare it for tax purposes.
Set out a formal agreement with your tenant outlining things like notice periods, contribution to bills and deposits. Take photographs of your property before they move in so you can use this as evidence if they cause any damage. Finally, make sure your insurance company knows about your new tenant, so you’re fully covered in the event of a claim.
Tailor the agreement
Make the tenancy agreement as relevant as possible to you and your life. For example, if you don’t want someone to throw parties or regularly have guests over in the evening, make this clear on the agreement. This means you’ll have a strong case for eviction if your tenant becomes difficult or does things you don’t like.
Notify the local authority
If you’re a single person living in a property, you’ll currently be receiving a 25% discount on your council tax. However, if you’ve got a tenant, this no longer applies. Inform the local authority to avoid being caught out and fined.