Taking on a lodger can be a great way to earn some extra cash from your spare room in particular if you make the most of the government's rent a room scheme which allows you to earn up to £7,500 tax-free. However, taking on a lodger has its pros and cons, especially if you are not used to living with someone else. This article shares top tips for living with a lodger.

Ask the right questions when you interview your potential lodger

Before agreeing to licence your furnished room to a lodger, it is important you ask them the right questions in the interview process. You should be able to maintain a professional relationship with your new lodger and your timetables and lifestyle should be compatible. Ask questions such as if they work from home or if they have any hobbies to help you determine if your potential lodger is the right person. During this step you should also check your lodger's right to rent status to make sure they are legally allowed to rent your room.

Establish boundaries with your lodger

A lodger will be sharing common areas of your home such as the kitchen, living room and a bathroom. If there are certain parts of the property they do not have access to or if they are not allowed to use certain facilities then you should clearly define the boundaries and communicate them with your lodger.

Establish house rules

If you require certain processes for repairs, managing utilities or would like to divide responsibilities within the house you can establish a set of house rules for your home and lodger. It is important to share these ground rules with your lodger early on in the interview process so that they are onboard with them from the start.

Take insurance

Whilst your house rules can define living arrangements and behaviour which will prevent damage, accidents are inevitable. Taking adequate home insurance and contents insurance are great ways to minimise the consequences and cost of accidental damage for homeowners.

Use a clear and robust lodger agreement

Once you have found the right lodger, explained the house rules and prepared your home with adequate insurance, you should use a lodger licence agreement to formalise the contract terms. A lodger licence agreement is not a tenancy agreement because lodgers are excluded occupiers. This means they have less rights than tenants because they are living with the resident landlord in their main home. Written agreements avoid surprises and help clarify what reasonable notice periods are for terminating the arrangement. A written agreement is also important to clarify core terms such as the licence fee and whether it includes utilities or not.