Want To Rent A Room? Finding A Flatmate Is As Easy As One, Two And Three
As the cost of living increases and job security wavers, many people have decided to take on a lodger and offer a room to rent. This private renting of a room will help them cover their household bills and their mortgage – giving them a bit of a financial cushion.
The number of potential flatmates too may be on the increase as some tenants may find that they can no longer afford to rent a flat on their own. Instead, they may turn to a private renting of a room in a house or flat to spread the costs.
The potential income from renting a spare room can be substantial, especially if the room to rent qualifies under the Government’s Rent a Room Scheme. This allows property owners and tenants offering private renting of furnished rooms in their home to earn up to £4,250 of rental income tax free – a bit of good news for cash-strapped homeowners and tenants.
Three tips for offering a room to rent and finding a flatmate:
1 Get ready to take on a lodger
Before you offer your spare room to rent, get prepared. Make sure your mortgage lender knows about your plans and ensure your home meets all the safety requirements. If you are a tenant, you’ll need your landlord’s consent. You should also find out the going rate for a renting a room in your area and decide how you want to share the household bills. Be sure to prepare the room to rent for your lodger by getting any maintenance work done, giving it a good clean, and putting in the furniture.
2 Decide what type of flatmate you want
As you will be sharing your home with someone make sure you have a clear idea of what type of flatmate you are after. Do you want a male or female, smoker or non-smoker… carnivore or vegan? Would you prefer to rent a room to a student, recent graduate just starting their career or established young professional?
3 Advertise your spare room
It will make your life easier if you think carefully about where you want to list your room for rent. You could use just the corner shop or local paper, but then only locals will see your advertisement.
Alternatively, those looking to rent a room in their home can list it online. This has the advantage of promoting your room to rent to a much wider audience, including students and young professionals looking to relocate to your area.
Instead of hoping that your ad to rent your spare room sparks interest with the right type of person, you could use a new online property portal that aims to link potential landlord with tenants and home owners with lodgers, such as that offered by u-rooms.
This innovative new website lets people with a room to rent or property to let explain the type of attributes they are looking for in a tenant or lodger. It also lets potential tenants and flatmates create a profile online. Landlords looking for tenants or homeowners (or tenants) offering the private renting of a spare room can look through the profiles to see who is looking for accommodation in their area. By linking these two parties online, u-rooms can speed-up and simplify the home searching process.
With more people looking to offer a private renting of their spare room to help with their household expenses, and more students and young professionals looking for a flat-share, at last an online property website has connected the two – making finding a flat-mate a breeze.
Posted in Renting | 
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Leave a commentDeferred Rent – Debits and Credits
Deferred Rent
What is it?
The simplest way to understand deferred rent is to think of an example. Let’s say you started a business and the first thing you did was sign a five-year lease for office space. In an effort to sign you as a tenant, the landlord (aka “lessor”) offers you lower rent payments in the first year that “escalate” (i.e. go up) as the years progress. To keep it simple, let’s say the rent schedule is this:
Year 1: ,000 / month = ,000 / year
Year 2: ,250 / month = ,000 / year
Year 3: ,500 / month = ,000 / year
Year 4: ,750 / month = ,000 / year
Year 5: ,000 / month = ,000 / year
These amounts represent the actual cash that you will be paying each month. When booking the journal entries for this, this will be the credit (either to cash or a payable). The question is what is the debit?
ASC section 840-20-25-1 states the following:
Rent shall be charged to expense by lessees (reported as income by lessors) over the lease term as it becomes payable (receivable). If rental payments are not made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used.
You see, the FASB requires that rental expense be “recognized on a straight-line basis.” This means that the same amount of expense must be recognized each month, regardless of the actual rent payment during the month. Let’s calculate our monthly rent expense.
From the table above, we can easily compute that the total rent paid over the course of the lease is ,000. (k +k + k + k + k). This figure, divided by the total months in the lease (60), gives us out straight-line rent expense:
Total Rent / Total Periods = Straight-Line Rent Expense per period
,000 / 60 months = ,500 / month = ,000 per year.
We now have the debit in our journal entry.
With a debit to expense for one amount and a credit to cash for another amount, the plug goes to deferred rent. Depending on the payment schedule, deferred rent can either be an asset or a liability.
In the case of a lease with increasing payments each year, as in our example, deferred rent is a liability. The liability balance builds through the first two years when the expense exceeds the cash payments, levels off during year 3 when these amounts are equal, and then drops down to zero over the course of the final two years when rent expense is less than the rent payments. The journal entries for each year are as follows:
Journal Entries – Year 1
Dr. Rent expense 1,500
Cr. Deferred rent 500
Cr. Cash 1,000
Journal Entries – Year 2
Dr. Rent expense 1,500
Cr. Deferred rent 250
Cr. Cash 1,250
Journal Entries – Year 3
Dr. Rent expense 1,500
Cr. Cash 1,500
Journal Entries – Year 4
Dr. Rent expense 1,500
Dr. Deferred rent 250
Cr. Cash 1,750
Journal Entries – Year 5
Dr. Rent expense 1,500
Dr. Deferred rent 500
Cr. Cash 1,750
Here is the monthly deferred rent liability balance over the course of the lease:
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Posted in Renting | Amo, Benefit, Credits, Debits, Debits And Credits, Deferred, Fasb, Journal Entries, Landlord, Lease Term, Lessors, Line Basis, Office Space, Periods, Rational Basis, rent, Rental Payments, Straight Line, Time Pattern | Leave a commentBenefits of Renting Homes to Owing Homes
There are several benefits of renting homes than owning one. Buying a property brings along too many complicated procedures. However, if you are renting homes, you would have to follow some very simple methods that can help you to acquire the property, without having to invest time and effort on banks, mortgages, loans etc.
The basic idea of renting homes is to own some properties in the real estate without any major investment. People often choose this method just to ensure whether or not the chosen locality is good and friendly, before making a full commitment for purchasing it. The outlook of the overall rented homes makes them the next-to-perfect solution for most investors.
Most people try to find their perfect homes by renting homes initially. Renting homes to own has now become one of the most preferred choices for the novice interests in the current market of real estate. This method, is indeed, quite similar to that of the method used for renting vehicles, wherein vehicles are given on lease first, and if the person likes the vehicle during lease, he might choose to buy it. Similarly, renting homes also give you these advantages of checking whether or not you want to live in the house, in that locality, and if you are comfortable with the whole idea.
Renting homes does not involve any major payments to be made before purchase (as down payments) or for closing the rent. The agreement is signed between the buyer and landlord with all the terms and conditions clearly mentioned. It is only upon agreement of both the parties that the property will be rented.