Have you thought about making some extra money from renting your spare room out?

Firstly, Can you rent out a room in your own house?

While there are specific regulations regarding the taxation of income from renting out a room in your home, it is feasible to become a resident landlord.

A resident landlord, in legal terms, is someone who resides in the same building as the tenant.

It is important to note that if your property is divided into separate flats or dwellings and you live in one of them, this situation differs from renting out a room in your primary residence and falls under a distinct set of regulations related to private renting.

Are the rights of resident tenants different to those of assured tenants?

Yes, they are different.

If you visit the governments website the guidelines are as follows:

"Resident landlords have greater freedom to end an arrangement because it is acknowledged that, should the relationship break down between the landlord and the person he or she lets to, the landlord is more vulnerable in his or her own home. Non-resident tenants also have rights to challenge rent levels that resident tenants do not enjoy."

Do you need any special permission to let a room in your house?

If you own the property outright, you don't need permission to rent a room. However, if you have a mortgage or a long lease, it's important to contact your mortgage lender or the freeholder to request permission before renting out a room. Failing to do so may result in a violation of the terms set by your lender or freeholder.

Will you have to pay income tax on the rental income if you rent a room in your house?

One of the most interesting facts is that under the Government's 'rent a room' scheme letting income up to £7,500 per year is totally tax-free, providing the room offered is furnished.

Anything received above this will be taxed at your highest marginal income tax rate. This will involve completing a tax return.

How to begin renting out your spare room?

It is best to start by outlining the rental agreement which can include:

• Room description - square footage, windows, ensuite

• Inventory of furnishings - detail all of the furniture and contents the tenant will be able to use

• Rules of residence - smoking permissions, parking facilities, access to outside areas such as a garden or patio, pets

• Amenities -  broadband, television, phone services, laundry facilities, gym

It is sensible to point out what is included within the rental price and which services may carry an extra charge, depending on usage, to be clear on costs to potential tenants.

Will renting a room in your home affect your home insurance?

If you plan to rent out a room in your home, it is important to notify your insurance company and provide details of the rental arrangement. This will allow your insurer to verify if your current insurance coverage will still be effective.

There is a specialized lodger insurance option that not only covers the heightened risks of damage, theft, and accidents but also offers protection in case a lodger holds the landlord accountable for any harm they experience.