Basement conversion for serviced accommodation
Have you considered a basement conversion for serviced accommodation? If you have a basement as a home owner which is available but unhabitable. Maybe the basement is currently being used to store a lot of rubbish, you are never going to use. This might be the perfect opportunity to look at the options available.
The current trend with Booking.com and AirBnB has become common in the UK. When UK citizens go on holiday to a warmer climate, you usually choose to stay in a hotel or self-serviced accommodation. As a home owner, you can enter this market yourself as well. The secret is that your property must have a unique selling point in order to beat your competition.
This can come from different angles. Is your property in a common or exclusive area? What amendities are nearby? Is there any landmarks or popular venues nearby? How far away is the property from public transport?
A lot of holiday makers are considering taking their holidays in the UK as to travelling abroad. This is a great opportunity to capitalise on this marketplace. There are many benefits for home owners when to consider with serviced accommodation. The government has a tax scheme called rent a room scheme. Homeowners who have one property can received up to £7,500 tax free per annum for a room rented out. That equivate to £625 per month or £144.23 per week. If you have a mortgage, this is subject to getting the necessary permission from your mortgage lender.
If you earn more than £7,500 per annum in rental income, it is taxed against your current tax position. Also if you have more than one property. The tax scheme is halved to £3,750 per annum as a result of more than one property.
If your basement is big enough for a self-contained unit. You will need to include sufficient room lightwells, windows and a separate entrance. It is important for building regulations and planning permission. It is equally as important to get an insurance backed warranty when doing works in the basement. This information is available through our of our other blog page post.
The benefit from having a separate area which is at least 30 square metres. The area is mortgagable as a studio flat and over 36 square metres is a 1 bed flat. This is great for creating an asset which can produce a cashflow. One of the benefits of having a serviced accommodation property. It can be classed by the council as an accommodation business. You can look to claim capital allowances and your income tax positon. However make sure you consult with an accountant.