/ Money

Have you made extra cash from your home or unwanted belongings?

Making money out of your home

While your home may well be your castle, have you ever considered that it could also make you money?

Recently, several of you here on Which? Conversation shared your money-saving tips on the cost of running your home last year. It would seem that there are plenty of ways to save your money – however, many tips honed in on the point of not spending too much in the first place.

But if you do spend too much, how can you recover your losses? Is it possible to make money from your own home?

Home-grown cash

Provided you’ve got the space and the flexibility, one of the obvious ways to make some extra cash is to take in a lodger. If you travel frequently and have a pet, somebody staying in your house might even be to your advantage for reasons other than financial.

In fact, you can earn up to £7,500 a year tax-free, which means you could receive £625 a month in rent without having to declare it to HMRC.

But, bear in mind that renting out a room may affect any claims you make on your existing contents insurance policy, or the premium of your next, so you should check with your insurer.

Or, if you don’t want to share your home on such a full-time basis and live in a touristy area, what about renting out your spare room to holidaymakers on sites like AirBnB?

Perhaps you have some extra space, such as a garage or a shed, which someone would happily rent out as storage space, earning you up to £40 a month? Or, if you live near a stadium, airport or train station, why not rent out your driveway, which could earn you up to £10 per day.

Rags to riches

Most of us have splurged on items that we’ve barely used. According to a study commissioned by Oxfam, each household typically has 143 of unused CDs, books and toys.

The same study found that the average person has a staggering 53 items of unworn clothing.

Good-quality clothes and shoes, especially designer labels, can be sold in second-hand boutiques, usually known as ‘dress agencies’, which either buy the item from you, or give you a percentage of the sale (sometimes on the condition of it selling).

You can sell unwanted goods with little hassle via apps on your phone, or online. The companies usually cover the cost of postage and pay the money into your account (or however you’ve specified) meaning a trip to the Post Office or even your nearest Collect Plus outlet is all you’ll need to do.

Or, if you’d rather keep hold of your underused belongings, you could consider charging other people to borrow them! Sites like Rentmyitems put local people in touch with those who have items they need but don’t want to buy.

Are you a serial unused item hoarder? Will you be spring cleaning and cashing in on these items? Have you made extra cash from your home or unwanted belongings?

Comments
Profile photo of duncan lucas
Member

Jessica- earn up to £7500 tax free ?? , when I am taxed twice on my small pension ? . I am also nearly on minimum earnings. Why have you not qualified your convo with – this applies to LANDLORDS and have you seen the eviction rates in London recently and the very high rates for rentals ? I happen to be a “hoarder ” because I love old electrical/electronic/engineering items . I am also a lover of art / Art Deco/Art Nouveau /old books/clocks /telephones / stamps/etc etc , many are there for me to enjoy not to sell , maybe on the point of death I might part with them but this is during a recession prices are down unless its gold/silver.

Profile photo of Kerry
Member

The rent a room relief is very helpful for those wanting to share their home (not live out landlords) to help towards the running costs and a few will even make a decent profit now the allowance has increased from £4250 to £7500.

Of course, this is turnover, you can’t deduct costs, only the £7500, so once income rises it’s often better to prepare accounts or at least consider it.

Profile photo of John Ward
Member

It’s worth reading the guidance notes accessed from the red “take in a lodger” link in the Intro as this clearly sets out the tax position. The rent-a-room tax relief scheme is good for people who find themselves with more accommodation than they need but cannot easily downsize without losing contact with friends, family and community resources. With luck a lodger might be able to help with running the home in return for free meals, cleaning or laundry. It is worth bearing in mind that the person renting the room is a lodger, not a tenant, so there is an expectation that they will share other parts of the house with the owner and sensible security precautions should be taken and appropriate conventions need to be established at the outset.

Profile photo of Kerry
Member

I think lodger agreements can be easily obtained which set out the terms. There is often a much shorter notice period too – from one month to six seems most common (on spare room website). Means this works both ways if the arrangement doesn’t work out.

It was introduced at the lower level back when interest rates were high and people needed to do something to help pay the house running costs. I had expected it to be stopped but am encouraged it’s been encompassed by the new government as it makes use of otherwise wasted resources.

Profile photo of Ian
Member

Can a family member be deemed a ‘lodger’ for the purposes of this, Kerry? I was thinking it they could this might resolve one of John’s concerns.

Profile photo of John Ward
Member

From experience of a section of our own relations I would say that it would be wrong to presume that family members are entirely trustworthy! I didn’t have any strong concerns but just think people who are attracted by this scheme in order to add to their income need to do it with their eyes wide open to the realities of life with a lodger.

Residential landlords are well-versed in managing tenancies and have other resources to support them. People who let out a room to a lodger are probably entirely on their own and doing it on a personal basis rather than a commercial one. They do not have a network of letting agents and lawyers to deal with problems that might arise. It would be interesting to hear the experiences of those who have taken in a lodger or been a lodger under this scheme.

Profile photo of Kerry
Member

I suppose they can – hasn’t that situation has been in place since time in memorial (my parents charged me £30 a week towards food and costs back in the days of the flintstones).

I guess, like everything, trust and a handful of luck comes into it but a signed lodger agreement goes someway to everyone knowing where they stand right from the start. No reason why you can’t ask for references if you aren’t accepting those leaving home for the first time. From cupboard and fridge shelf entitlement, to rules on recycling and bin day the agreement should cover it all. And, although a months notice is short, if the arrangement isn’t working out thats a good time period on both sides.

This is similar (although now tax free to £7500) to my arrangements in 1985 when I spent a year at a polytechnic. All the halls were taken by degree students and I had 10 days to find somewhere. The house I found was living with the owner, some meals provided, with a shared room and bathroom. It was a very good option for what I call temporary-permanant accommodation.

And if apprenticeships take off now the apprentice levy is starting, we will need more of it as they can’t rent halls but will need somewhere economic to live.

Profile photo of Kerry
Member

It’s definitely worth considering good ways of mitigating risk. Take a look at spare room website. There you can choose the profile of the lodger you want, so you can avoid males or females or certain ages or ask for professionals – even only provide mon-fro let. You can ask for references. And deposits. With an agreement you have some sort of mutual understanding. However, there’s always more that can be done as you never know, I suppose, if you are going to pick that bad egg.

Profile photo of John Ward
Member

On the selling of possessions to raise money, we have used auctions in the past and are currently in the process of putting together a number of lots for sale by auction. We have decided to reduce the amount of furniture and effects in our house, partly to make it look more spacious and also to rationalise, having acquired new furniture or inherited things. We have given quite a few items of furniture to the British Heart Foundation but some things are too big, or not the right style, for their customers, or have a value that is worth realising. Having identified a number of pieces of furniture we are adding boxes of books that are of no interest to charity shops, some office furniture and equipment, and some small collections of useful household items. These extra things won’t fetch much but will pay the auction fees and the haulage charge. It is worth thinking carefully about what to include in each lot so that the not-so-good stuff flies away on the tails of the good.

Apart from any money this exercise might make it is a convenient way of disposing of things in one go that are too good for a skip: a van comes round, they load it up, hand over a document, and the day after the auction sale we receive a cheque in the post; no messing about on-line, no concerns over payment or collection or delivery, no complaints or repercussions.

Plenty of people go to the sales in our part of the country so most things will sell, but if they don’t the auctioneers get rid of them to a charity or will let you have them back. Auction goods have to be useable and in decent condition. There is a flat-rate charge for testing any electrical equipment so low value items are not a good idea. Art, antiques, historical items, and collectibles seem to do quite well [so long as one is not expecting London prices and they are in tune with current market trends]. Unfortunately for their egos some people have built up collections of commercial limited-edition goods which, when they come to put them up for auction, give rise to great disappointment because the market is flooded with such stock or it is not the flavour of the month, or, more to their chagrin, has no intrinsic value; nevertheless, someone will buy them so they will get what they are actually worth on the day and they have had the satisfaction of dusting them for many years.

It is worth keeping an eye on auction sale results in order to see what sort of things sell well and what is not worth the trouble. For specific pieces, e-Bay is as good a guide as any to what is ‘in’ and what is not.

Profile photo of John Ward
Member

Lot’s of good advice there, Kerry. It is certainly a good idea to have a formal agreement in place.

We have a relative who generally seems to be lodging in between periods of homelessness. He has very few personal goods apart from his clothes so moving from one place to another is easy and he doesn’t mind receiving quite short notice.

I would say it is very important for the homeowner to establish clearly what the smoking policy is and to enquire about any particular habits or behaviours. Images of Mr Rigsby in Rising Damp come to mind.

Profile photo of Kerry
Member

Oh yes, smoking policy. Been such a long time since knowing any smokers, I’d quite forgotten that!