Make £3,000 while you’re away for Christmas and New Year
With the rise of the ‘sharing economy’ which lets individuals rent, share or sell possessions and property, anyone planning to spend Christmas and New Year away from home could make enough money to cover the trip as well as some left over cash for the presents.
Based on the away dates from Friday 23 December until Tuesday 3 January (10 days), here’s how you can make money from your property, your driveway and your car.
Rent out your home – earn up to £2,720
The amount you’ll be able to earn over the 10-day period depends on where you live and how many people your property can accommodate. Central London properties tend to attract higher prices, and those that can accommodate more people can get you more money.
Research by My Property Host, which manages short-term Airbnb lets on behalf of homeowners for a fee, found that an average UK property which can accommodate two people could net you £870 over the Christmas and New Year period. For an average London property which can sleep two people, you could earn £1,000.
If your property can hold four people, then the average amount you can receive in the UK is £1,520, rising to £1,890 in London.
For six people, an average UK property could be rented out for £2,160, whereas in London you could earn in the region of £2,720.
However, you will need to factor in Airbnb fees (3% for the host) and those by My Property Host (19% of total booking, including cleaning and insurance).
One advantage of renting out your home over the period is that Airbnb has promised to donate 40p from every December booking in London to help the homeless.
What are the tax and insurance implications?
If you rent out a room in your main home you will come under the government’s Rent a Room scheme allowing you to earn £7,500 tax-free each year (£3,750 for joint lettings), without the need to report the income. If you go over this amount, then you need to fill in a tax return.
If you’re renting out your whole home, it’s unlikely the earnings will be protected from tax under the government’s Rent a Room scheme, though you may be able to deduct expenses when you submit a tax return.
Chas Roy-Chowdhury, head of tax at the Association of Chartered Certified Accountants (ACCA), said HMRC will look at whether you’re trading, and it’s best to be upfront about these earnings: “If you’re not sure whether you should be paying tax, contact HMRC. You need to be aware that if you advertise your property, it has software which will make it aware that you’re trading as a business.”
When it comes to insurance, check with your provider to see if there are any restrictions on letting out your property and there could also be restrictions based on whether you own or rent your current property. There are now specialist insurers who cater for people renting out properties on sites such as Airbnb. See YourMoney.com’s What kind of insurance does an Airbnb landlord need? for more information
Rent out your car – earn up to £664
If you’re going away but travelling by public transport therefore leaving your car unused over the festive season, you may be able to hire it out via a peer-to-peer car rental site to make some money.
Analysis by EasyCarClub, the biggest player in the market found that owners of an economy group car in London which is five years old could hire it out for £371.50 over the 10 days, while a 10-year-old car could still earn you an average of £362.50.
If you have a fancier, premium car in London, you could potentially earn £663.95 for one that’s five years old, while a car that’s 10 years old could get £645.92.
For the average national car owner, EasyCarClub revealed that for a five-year-old economy car, you could net £259.36 while a 10 year old car could earn you an average of £251.92,
With premium cars, a five-year-old car could see you earn £431.38, while one that’s a decade old could make £402.07.
EasyCarClub confirms these are the average prices after its charges: 10% + VAT, so 12% of the car cost.
What are the insurance implications?
The top three known peer-to-peer car rental companies have separate or third party insurance cover which means your existing insurance policy is unaffected. See YourMoney.com’s How car owners can make £500 a week for more information on these car rental sites.
Rent out your driveway – earn up to £150
Homeowners living in town centres or close to music and sporting venues are likely to make more money renting out their driveways over the festive period.
Yourparkingspace.co.uk predicts that the average landlord could earn £65 from each parking space rented out over the 10 days, but in London, this figure rises to £150 over Christmas and New Year.
Its top tips to ensure your driveway’s rented out over the period include setting a competitive price, uploading photos, writing a detailed description, encouraging people to leave a review and to respond to any inquiries as soon as possible.
See YourMoney.com’s Top tips for renting out your driveway for more information about the process and ways to boost your income.