Posted on 20.8.15
Airbnb is one of the most popular online platforms offering you a simple way to rent out your space at a time when it suits you.
A substantial percentage of monthly incomings for most people leave bank accounts fairly sharpish after pay-day, going towards mortgages, rent and bills. Renting out a spare room or even your whole property is not a new invention, however, thanks to the onslaught of social sharing, the process has become much easier to handle.
Airbnb was founded in 2008 and has grown astronomically since. There are now more than a million listings in 34,000 cities across the world. You can rent all manner of abodes: a private room, an apartment, house, boat, tree house, even your own island!
The difference with Airbnb and other options to rent properties is that it allows much more flexibility and is incredibly easy to use for both people letting out their property to the guests looking for somewhere to stay.
What do I need to consider?
Apart from the typical fees that Airbnb charge (usually a 3% cut on every booking from the hosts, and 6-12% from guests), there a few potential catches that you may not have thought about.
It is important to check your mortgage contract. Some contracts stipulate that you must ask for permission before letting your property out, so check what yours says. Letting your property, or a room, out on a short-term basis usually isn’t a problem, but they might not permit you to turn your home into a buy-to-let property!
If you are renting a room or a property then it is necessary to ask your landlord for permission to sub-let, as this may contravene your contract.
There are very few instances when not paying income tax on earnings is allowed, both in the UK and further afield. Not declaring your profits is illegal. Despite this, there are tax breaks available.
If you rent out just a room in your house to someone else then there is a Rent a Room tax-free allowance. This does not apply however, to your entire home. The maximum you can earn tax-free using this scheme is £4,250 a year, so any earning above this will be taxable. In April 2016 this allowance is set to be increased to £7,500.
Check your home insurance contract. If your contract says that you can’t let your home out, but you do and something happens, for example there is a fire, you’ll have a huge bill to pay. So, make sure you check with your insurer and, if necessary, update or amend your policy so that you are fully covered.
A point to note – if you have paying guests, you will have to carry out a fire risk assessment as fire safety laws apply. There are a few other checks you need to carry out too, such as gas safety, appliances and pipework.
To make sure you don’t do anything illegal, it is up to both hosts and guests to make sure that their use doesn’t breach local housing laws and regulations, which can differ from country to country and sometimes city to city. Airbnb also do not make background checks on anyone who uses their service, so make sure you read reviews and take ratings into account when making your choice.
If you need any legal advice in regards to property occupation and agreements, then get in touch with our expert Commercial Property team. Our team has significant experience dealing with landlord/tenant contracts and all other legal property aspects. Call us on 0343 507 5151 (standard landline number), send us an email to email@example.com or fill in our online form and we will call you back.