I know what you’re thinking, how have I saved £12,500 without using my paycheck?
For a while, I had been thinking about how I could make some extra money on the side/from home without starting a part-time business. I have considered setting up an online store and importing products from China and selling them on amazon.co.uk or Shopify, although great ideas and something I could definitely make a success out of, at that moment in time I felt overwhelmed at the thought of it all. I wanted to start small with my side hustle, I didn’t want to run before I could walk. Then I remembered something I heard earlier that week … A few days prior I was relistening to a Les Brown audiobook and in one of the chapters he talks about his friend with alopecia and the everyday struggles she goes through and what kept running through my mind was one simple statement; “use what you got!”
So the question is what did I have? I had this big beautiful victorian apartment, it’s a 5-minute walk from the town centre (7 minutes with my little legs), it has a large kitchen, a VERY large bathroom and two king-size bedrooms (one with an ensuite) and one double bedroom, which was being used as a dining room.
My boyfriend works away and it’s just me most of the time and we only really used the dining room on special occasions.
I have always been interested in real estate, and have one property that my boyfriend and I jointly own and rent out. So the thought of renting rooms out in our home didn’t scare me at all.
So after some consideration and a little research, I decided to rent two of the unused rooms out. The extra cash could come in handy someday … maybe towards an emergency fund or a deposit for my next house.
So I listed the property on spareroom.com and waited for the enquiries to come flooding in, and they did.
Here in the UK we have a Rent a Room Scheme, which allows you to earn £7,500 (approx $9,600) tax-free from letting out furnished accommodation in your home.
Which rooms were the most profitable?
I soon realised that the kingsize ensuite bedroom would bring in the most amount of money, £650 per month in fact and the second king size room for £500.00 per calendar month. I moved into the dining room, it was ideal but I understood the bigger picture. A small sacrifice for the long term gain.
I had this money paid into a separate bank account so I wasn’t even tempted to dib into the money whenever I wanted to indulge myself. It just felt like free money! I didn’t have to purchase another buy to let property, I simply made money with what I already had.
So after 12 months I had an astonishing £13,800 in my bank account and after taxes I ended up with roughly £12,500.
Previous to renting the rooms out, our bills including the mortgage were a total of £1,050.00 per month they increased by less than 5% which was mainly due to extra water being used. Gas and Electric roughly stayed the same as I was already paying to light and heat the property.
So there we have it, it’s that simple. Granted there are other ins and outs we can discuss like setting up an agreement but this is how I made an extra £13,800 in a year. Are you willing to give this a try?