Making money from renting by the room

publication date: Jul 7, 2014
author/source: Guest article by


Renting by the room, what are the benefits?

With savings rates at record lows for years and the promise of a juicy pension on retirement looking unlikely for most, many UK savers and investors are turning to property as a way to guarantee income and security into their retirement.

A standard buy to let will normally deliver a rate of return that is around where savings used to be pre-crunch, but with a little research and planning, you could be making much more.

One particular area of the property market has been seeing significant growth, but is mostly overlooked by general buy-to-let advisors as it does require investors to be more hands on and some extra knowledge. For those with the inclination to get involved, returns are significantly better than standard buy to let, offering double or triple the yield of a standard rental. With shared living already the fastest growing tenure in UK housing, according to Census figures, it’s time to shed some light on what renting by the room can do for your property income., the UK leader in shared living, highlights three main advantages to renting by the room for landlords and property investors, and offers tips for how to make this strategy work for you.

  • Increased yield. A three or four bedroomed house rented to individual tenants will give you a significantly higher income than the same house rented to a single family. Look for properties with large double rooms, and proximity to public transport, so that each tenant doesn’t have to rely on a car (and parking it).

  • Fewer voids (empty periods). With any property, you should factor in a period every year when it might be empty, not earning you any rent. If your tenants give notice, it can take a while to replace them. If you rent by the room and one tenant leaves, you still have a healthy income to cover the mortgage from your remaining tenants, and due to healthy demand, should be able to find a new tenant very quickly. Young professionals are more mobile, willing and able to move in at short notice, unlike families who have to arrange things like schools.

  • No agency fees. Room rentals aren’t traditional agency fodder – many shy away from this type of work as they’re not used to it, but you can use this to your advantage. Being hands on means you can learn more quickly, and in any case you are responsible for the property and tenancy being handled correctly even if you use an agent. You might as well save the fees, giving the tenants a better, more personal service (and save them fees too!).

Although renting by the room has traditionally been the preserve of students and the unemployed, there is now a massive market for rooms for young professionals, and even more experienced people who need to be mobile for work. Taking advantage of this demand will enable you to maximize your profits from your rental property. Explore the ins and outs of renting by the room with our renting a room checklist.

    All our information is brought to you by Kate Faulkner, author of Which? Property books and one of the UK's top property experts.
    This website is Copyright © Designs on Property Ltd and protected under UK and international law.