Sharing your home can be a great way to reduce your household bills and meet new people. But it’s also important to ensure your bases are covered should the worst happen.
The soaring costs of living combined with low rental vacancy rates is ensuring more people than ever before are throwing open their doors and inviting strangers to live with them.But while it can prove a daunting process, setting up your home to share with flatmates can be a rich and rewarding experience, with lifelong friends made and a host of fun experiences to share.
Not forgetting, of course, the financial advantages. According to research by share accommodation website Flatmates.com.au, homeowners who elected to let out their spare bedroom earned an average of $197 per week – or more than $10,000 per year, based on the 2016 national average.
Before throwing open your doors, however, it is important to undertake a few useful checks to ensure you are setting yourself up for a happy harmonious house rather than the stuff nightmares are made of.
What you may need to pay
Generally speaking the cost of subletting a room in your house to a third party should not be an expensive experience. Unfortunately, one of the downsides of being a share house landlord in Australia, however, is the need to pay additional tax. According to the Australian Tax Office, if you rent out part of your home – even just one room – the rent that you receive will usually be regarded as assessable income.
On the plus side, there are some expenses that will be tax deductible so it’s worth speaking with a trusted financial advisor to see where you stand.
Ensure your insurance is up to date
If you’re planning to open your home as a share house, it’s super important to ensure you get the right kind of insurance to ensure you’re adequately covered in the event something goes wrong.
Most standard home and contents policies do not cover damage caused by flatmates who are letting a room or their visitors.
Flatmates.com.au says to ensure you are not caught short speak to your preferred insurer about landlord insurance or specialised short-term home and contents policies. At a minimum, look for a policy that covers you for theft by tenants or guests, malicious damage or vandalism and loss of rent.
Do a character check
It’s important that before you hand over your keys, you consider checking to see if your perspective housemate has been in trouble before. While a full police check is not usually necessary, a casual canvas of their social media accounts may offer some indication about the way they live their lives.
Flatmates.com.au suggest it is also worthwhile seeing whether they have been blacklisted as a tenant by checking the National Tenancy Database.
Check your landlord rights and responsibilities
Before deciding to open your home it is important to ensure you are educated about your rights and responsibilities as a landlord. Rules tend to differ from state to state.