Today apps like Airbnb, TripAdvisor, Homestay.com, Booking.com etc. have made it really easy for homeowners to connect with renters. While these have obviously increased competition in the field, it has also made renting easy and practical. So if you’ve got a spare flat somewhere, don’t shut this door instead try and make it work.
Keying in the essentials
To rent out a room/house make sure it’s liveable, the more efforts you put into this more people will want to live in your house. Put yourself in their shoes, you won’t mind paying a few extra bucks to live in a clean Airbnb anywhere in the world. As a home-owner understand that the renter expects certain amenities such as Wi-Fi, basic items like tea, coffee, salt/pepper, water, cleaning and laundry, along with groceries for breakfast, and electricity bill. Of course, these aren’t free and you must include them in the rent amount.
“We have offered amenities along with the house always such as Wi-Fi, cleaning maid and good company. In our situation, we have always looked towards providing a home and not just a room. All our apartments are furnished and this too helps with the setting rent price.”(Sasha Berry renting rooms for over 10 years in Mumbai)
Locking in the cost
To lock in a cost for your spare room consider these factors
- Location: One way to put a price on your spare room is by checking the rent charged by others in your area. This will give you a rough idea of how much you should charge for daily, weekly and monthly bookings. Usually, rooms at prime locations, close to tourist’s spots, good access to transport are priced higher than other locations.
- Size: Along with location you need to consider the size of your house. For instance, the average rent for a 1 BHK in Lower Parel is around Rs.41, 000 but for 2 BHK it’s around Rs.1, 57,000. But a 2 BHK at Vashi is much cheaper and the average rent is Rs.25, 000. To help you compare rent rates across locations use tools like Makaan.com.
“We started out as low as 15k as that was the market price, usually, you divide it as per rent pricing of the area. Yes, the location and quality of space do define the costing. We have offered amenities along with the house always such as Wi-Fi and cleaning services,” says Sasha.
- Costs and charges involved: While charging rent, don’t forget to include the costs you incur for your guests such as Wi-Fi costs, house help, breakfast etc. If you’re renting the room out on platforms such as Airbnb consider the commissions and charges as well. For instance, Airbnb charges between 3%-6% to list your room on it, but they have no restrictions on the amount your charge as rent. So price your rooms accordingly.
Laying out the welcome carpet
Nowadays there are many platforms such as Airbnb, TripAdvisor, Homestay.com, Booking.com that make listing out rooms and houses easier for renters. These platforms, easily connect you with guests and you don’t need to deal with the hassle of doing it yourself. But remember that in many states to list a property online you need to register it first and get a permit to list it. This procedure is fairly easy, but the exact rules vary from state to state. So before subletting your home check for all these details with your tourist district office. You may also need to get an NOC from the society building which is also easy enough unless the society makes an issue
P.S- In the case of homestays many states do not recognise it as a commercial enterprise, so you won’t have to pay service tax.
Sasha recommends procuring copies of your tenant’s personal documents and also an advance deposit from them for security reasons.
Ringing the doorbell to success
Once you’ve done all groundwork for renting your spare apartment, you’ll finally start earning some income. But remember this income varies on the season, demand for the room and also the number of rooms you have to sublet. “Keep in mind, however, that the bed and breakfast is not a high-income industry. This is not a business you go into to make a lot of money,” cautions Nancy Sandstrom, a former lecturer on B&B startups and now in her sixth year as an innkeeper. “You can make a profit, and many of your personal expenses are semi-covered. But it’s a lifestyle decision. You’ll make your real profit when you sell.”