How can you make money from your home?
Interesting article from the United Kingdom.
In simpler times, people threw Tupperware parties or took in lodgers. Now they run pop-up supper clubs or rent out spare rooms on Airbnb. Some do it for fun - there’s nothing like cooking for strangers or doing a bit of towel art on Egyptian cotton duvets - but most people do it for the money.
There is a growing sense that home is not just an appreciating asset, but a means to make ends meet, part of the global “sharing economy” that allows us to trade our private spaces as easily as selling collectables on eBay.
But first you need the right house: with an eye on income potential, you might look for extra guest rooms with en suite bathrooms, outhouses (perfect for holiday letting) or extra parking spaces (a useful income stream for city dwellers). And for some houses, looking gorgeous is all it takes.
Sign up to Airbnb
Never heard of Airbnb? Peter and Jane Saunders hadn’t either, until their son suggested they offer their spare rooms to paying guests. All four children had left home, and the couple were left rattling around in a six-bedroom house. They missed the chatter of family life so much they were thinking of downsizing. Instead, they took their son’s advice.
Founded in 2007 as a kitchen table start-up, Airbnb is the global internet phenomenon that enables “hosts” like Peter and Jane Saunders to upload pictures of their guest rooms, set a price and wait for the bookings to come in. The website now features two million homes in 190 countries, of which 81,000 are in the UK, and it’s showing no sign of letting up. In the UK alone, listings growth increased by a whopping 86 per cent last year.
Listed under “country vibe so close to the city”, the Saunders, who run an upcycling furniture business, offer a choice of five rooms in a Victorian house on the edge of Exeter in Devon, each charged at a minimum of £35 a night and let, on average, for four nights a week. “We had massive misgivings about having strangers in our home,” says Mr Saunders. “Now we look forward to people coming.”
The rooms have been tarted up, boutique-b&b-style, but apart from putting televisions in each room, they have not had to make a significant investment (only one guest room has an en suite). They serve breakfast in the family kitchen, and their weekly flow of international guests includes parents of university students and house-hunters. It has, they say, become a way of life.
Potential income: Around £2,000 for letting one room for 46 nights a year.
Pros: Airbnb’s commission (or “service fee”, which is charged to the guest, as an addition to the room rate to the tune of 6-12 per cent) includes a Host Guarantee with up to £600,000 worth of insurance cover. The website allows hosts to vet guests – and decline them. Cash is paid up front.
Cons: Endless laundry, cleaning lavatories and washing up. The income is taxable, and fire safety measures should be implemented.
Try registering your house with one of the numerous location agencies who are out there scouting for character properties with star quality. The big money is in films (from commercials to movies), but the bread and butter is in photoshoots, usually for fashion magazines, catalogues or homeware companies. Not quite so glamorous perhaps but more likely to keep your property in regular employment, as long as the house has got what it takes.
According to London agent jj Locations, the essentials are space, natural light, plenty of parking and a handy location, preferably inside the M25. One of the most popular candidates on its books is Brondesbury Park, a private house in Kensal Rise, north London. It is a large detached Thirties property with a huge kitchen, very large garden, Crittal windows, and parquet flooring.
“We could book this property nearly every day of the week,” says one of jj’s location agents, Cat Hydes. Clients include a BBC film crew, a celebrity shoot for a Sunday supplement and an advertising campaign for a furniture company. They like the property’s generous spaces, the sparsely furnished rooms and the palette of colours.
“It’s got lots of nice features,” says Hydes. “But nothing too distracting.”
Distracting features might be exactly what the client is looking for, but generally the demand for a particular style of house follows fashion. On trend at the moment, are Scandi influences, a touch of cowboy, panelling and polished concrete. And the house doesn’t have to be perfect: “shabby chic just goes on and on” (think peeling paintwork, rust and raw plaster).
Some of the larger clients are willing to travel, but in general it helps to be in London.
Potential income: As a rough guide from £500 to £2,000 a day depending on the client.
Pros: Occasional brushes with celebrity (a Kate Moss beauty promo perhaps). Agencies take care of insurance and clients leave the place as they find it.
Cons: Very competitive – as a rough guide, J J Locations takes only 10 per cent of the houses they are offered – so it’s not a reliable income.
Swap it for a holiday
Finding the extra cash to take a break can be tough, but that’s where house swapping comes in. Why pay for expensive hotels and restaurants when you can live in a fully equipped home that allows you to shave off hundreds of dollars from your holiday budget?
“Our members save an average $3300 when they swap their homes for a holiday, because the accommodation is free,” says Debbie Wosskow, founder of LoveHomeSwap.com.
There’s usually a joining fee for such services, but as well as saving on lodging and food, members can negotiate on borrowing the car, museum and gym memberships, and even expensive sports equipment (such as ski hire), reducing costs even further.
Wosskow claims 62 per cent of her clients are able to take longer or more frequent holidays because of the savings they make.
Bristol-based Joe Young is another Airbnb host, but instead of renting rooms he rents four apartments, all within Paintworks, the “creative quarter” where he lives.
After staying in an inspiring Airbnb in New York, he decided to buy the flat next door: a “stunning two-bed loft conversion” which offers self-catering breaks for up to five people. The flat did so well, he bought another – and then another.
Two years later, he has given up his former job running a street-art gallery and concentrates on his property venture which lets serviced apartments through one of several booking websites, including his own. “It started off as a bit of fun,” says Young. “Now it’s a serious business.” And it taps into a growing trend among urban guests for choosing cool self-catering over a hotel.
He bought all four apartments (for £170,000 to £270,000 each) on buy-to-let mortgages, but this model could easily be replicated on a smaller scale by turning a basement, or an attic, into a self-contained apartment. According to Young, who has achieved 90 per cent occupancies, it’s worth investing in top-end fittings and striking furnishings (he’s gone for a vintage industrial look – “very New York”).
Potential income: At an average rate of £140 a night (with a minimum stay of two nights), each of Joe Young’s apartments earns £60,000 to £70,000 per year.
Pros: Far better returns than on a standard shorthold let.
Cons: But more time-consuming and with much higher costs – around £1,500 a month in laundry and cleaning bills, plus constant updating and maintenance.
How to strike gold in your home
- Uncluttered homes work best. Try to give the client a blank canvas and you will need to be very tidy.
- However, the extreme opposite can sometimes also apply. Very cluttered homes with lots of quirky pieces are on trend, particularly those with a vintage feel.
- Feature walls that are distressed or with panelling are also popular.
- Make sure you have family space upstairs so you can get out of the way.
- If you can’t be on hand during the shoot, make sure to be on the end of the phone in case of any problems.
- Don’t rely on this as a main income stream. In most cases it supplements another wage.
- A kitchen with a large island and the hobs behind it, are in high demand for cookery programmes.
- Be open with the client about your schedule, for example, what time the kids come home.
- Talk to your neighbours. An open dialogue about your hosting activity may help them feel more at ease.
- Short-term rentals in London are subject to restrictions. If you are planning to rent out a room for more than 90 days you will need permission to change the use of your home.
- The money you make is an income and is subject to tax. However, you may be entitled to “rent a room” relief.
- Make sure there is no clause in your mortgage preventing you from renting out your property or room.