Earn over £2,700 extra a month from your spare room – top 5 UK cities paying the most | Personal Finance | Finance
Renting out a spare room is one of the easiest ways people can make money in 2023 as it could bring in potential income of £2,742 each month on top of one’s main source of income. A new interactive calculator, developed by Airbnb experts at Pikl, can reveal how much extra money people could make with an Airbnb side hustle, from renting out a spare room to a whole property.
Half of British households have a spare room according to Property Reporter and could earn an extra £7,500 a year tax-free.
One way to make an income from it is to list it on Airbnb where it’s possible to earn up to £2,742 a month depending on which part of the UK people live in.
The interactive calculator was created alongside an in-depth study into how much Britons can make across the country by renting out their spare room.
The data even revealed that those in St Davids, Wales could earn more in a month than those house-sharing in London.
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People renting a room in this area could pocket up to £92 each night someone uses the room, compared to £78 in London.
Below are the top five UK cities with the most impressive Airbnb profits.
Ranking UK City: Average Spare Room Charge Per Night, Potential Earnings Per Month
1 St Davids, Wales: £91.40, £2,742.00
2 City of London: £78.80, £2,364.00
3 Westminster: £73.00, £2,190.00
4 Ripon: £70.40, £2,112.00
5 Kingston upon Hull £69.80, £2,094.00
The full details can be found at Pikl.com as well as the ranked list of 68 cities based on their potential earnings.
Before renting out one’s property, there are a few things to consider and practical steps to take.
The interactive calculator takes users through a series of practical considerations that’ll inform their forecasted Airbnb earnings.
The average nightly rate is the first aspect to gauge, followed by the expected number of nights potential hosts anticipate their room to be booked up for.
Hosts in some of the UK’s major cities may expect consistent bookings, whereas those in seaside hotspots or at rentals within reach of national parks may need to factor in some more weather-dependent seasonality.
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The average number of nights per stay is the next factor, and this is also likely to vary depending on the expected guest clientele — from providing one-off accommodation for commuters to hosting long weekend visitors for hen-dos, Christmas parties, or summer staycations.
Moving onto more practical elements, the calculator evaluates the average cleaning fee per stay, the current utility bill of the entire house, and the monthly insurance cost.
The taxes incurred with hosting guests is then added into the mix, along with property management fee deductions — applicable to hosts that have someone managing the property on their behalf.
Finally, the tool adds in the fee that hosts opt for, charged as standard by Airbnb.
The consequent figure gives homeowners an insight into how they could benefit from making the most out of their property — and it’s an especially lucrative opportunity given the ongoing cost of living crisis, with many Britons already looking for creative ways to balance their outgoings.
Kellie Steed, Mortgage Expert at money.co.uk, said: “One way you can benefit from taking in a lodger is through the government’s Rent a Room scheme.
“This allows live-in landlords to earn up to £7,500 a year of tax-free cash, anything after that will be taxed. If you make less than the £7,500 threshold, then you don’t need to do anything and your tax exemption is automatic.
“However, if you earn above this threshold, you can opt into the scheme by letting HM Revenue & Customs know on your tax return, this way you can still claim your tax-free allowance.
“You can opt into the scheme at any time if you are a resident landlord and if you run a B&B or guesthouse.”