How To Price Up Rooms For Rent

The popularity in renting single rooms is ever growing, with shared accommodation becoming more of a plausible financial option for most young people. The demand will probably increase with the proposed housing benefit changes being implemented in January 2012. The new changes mean that many people under the age of 35 on benefits may no longer be able to afford a self contained property. Renting out your spare room is also a great means of earning some much needed extra cash, with the Rent a Room scheme allowing you to earn £4,250 rentable profit without being taxed.

You may have bought a property to let or you may just be considering to rent out your spare room to a lodger, in either case it is important that you place a realistic price on the accommodation available in order to secure you a tenant.

A competitive rent price reflects prevailing rates, so simply adding up your cost of owner ship will not do. Researching similar rented units and checking newspapers and online ads in your local area can give you more of an idea of how your room for let will price up.

Other features to take into account will be location, parking space, garden space and general ‘state’ of the property – obviously more modern and clean properties will achieve higher prices than older outdated properties. Also, will you let out the property furnished? If you want to take advantage of the Rent a Room scheme the bedrooms will have to be fully furnished. Another major aspect to be aware of is the utility bill expense – will you include this as part of the rental price or allow tenants to split the bill between them?

If you have a whole property and are looking to rent out rooms individually you will have to look at whether the researched local prices will cover the whole cost of your mortgage, or even perhaps leave you with profit. Additionally, prices of different individual rooms may vary – you will not pay the same for a double room as you would for a single.

Example:
A property has 5 bedrooms: 2 x double rooms with en-suite, 1 x double room and 2 x single rooms. How would you individually price them? Perhaps other similar whole rented properties around the area bring in a rental price of £1500 per month, how then do you apply this figure to your own property? You would also have to allow the advantage points of the property to be reflected in the price – perhaps you have two reception rooms, a double garage, utility room and large kitchen. Ultimately you could choose to split a whole price of £1500 accordingly, perhaps like this:

Bedroom 1 (double with en-suite) - £350
Bedroom 2 (double with en-suite) - £350
Bedroom 3 (double) - £300
Bedroom 4 (single) - £250
Bedroom 5 (single) - £250

Thus, you are applying a reflecting price to the room on offer. These of cou rse are hypothetical numbers that may not be relevant to your location or property. Consider a 5 bedroom house in general – you would expect it to be fairly spacious and perhaps with a borderline of luxury elements – and most people can dream only dream of being able to afford to either rent or buy a house like this. By sharing the accommodation with other individuals it immediately becomes a viable option.