Seasonal or year-round activities at your home could boost your bank balance and even help pay off the mortgage, says Kya deLongchamps.
There's an old expression that a large house should “wash its own face”.
Could new activities at your home (seasonal or year-round) contribute to the bank balance and even pay off your mortgage more quickly?
Could you or should you set up a dedicated business from home, part-time or even full-time?
Obviously, you need to take into account your skills, your current personal and professional situation, how much time you have outside of present work, and key in any capital costs and ongoing expenses involved in a new money-making venture.
Changes are afoot in what’s permitted in what are termed rent “pressure zones” including the city of Cork.
Still, using your own private primary residence, online platforms including Airbnb offer a fertile source of income year-round for short term accommodation for tourists and those travelling for business.
Airbnb has claimed that in 2018 their portal generated some €700m in revenue in Ireland between income for hosts and associated spending within the country.
First of all, it’s vital to analyse what you have to offer and who is likely to be suited to and attracted to your accommodation, be it a single bedroom, a double-decker bus conversion or a granny flat (without the granny).
What other services might you provide to tickle up the fee? Would you manage breakfast or even a very special evening meal for your guests?
Competition is fierce, and with an already feted and accredited B&B network in place across the country — your ability to both market and then deliver on your promises will affect the experience of your clients and the reviews on social media to follow.
These public critiques can be impactful on next year’s bookings.
Can you see yourself co-coordinating your calendar, possibly dispossessing your older children of a better bedroom, getting good (honest) pictures up online and hosting for not only your accommodation but acting as a patient ambassador for amenities in the area?
For the truly, deeply committed, resolutely chipping away at their mortgage debt, it is possible to move out of the house for periods and rent the entire building during key events such as landmark concerts and sporting fixtures.
Hotspots in the country according to Airbnb outside of the capital and major cities include Killarney, Dingle, Westport, Kilkenny and Tralee.
If you’re backed up a mountain in a quieter location what is your likely income and strike rate?
This might take a couple of seasons of being responsive to change to determine.
Stepping away from the glamour of Airbnb is the old fashioned route of Roger the Lodger — a student, or adult worker living with you and paying by the week/month to share your house or to use part of the building.
Generally, we think of lodgers as someone with the sole use of only one room — their bedroom and perhaps en-suite, but there’s potential to explore and develop self-contained, self-catering units on your property too.
Just keep in mind, that the useful tax clawbacks covering rentals at home are highly specific.
The arrangement can vary between classic “digs” where the resident family provide meals and laundry services, to a more formal arrangement of sharing the kitchen and downstairs areas as communal spaces.
If you have suitable space it could mean total separation. If you intend to just let out the spare room, the sensation of “invasion” might be close to zero with adult children already clattering in and out at all hours.
The primary attraction with renting spaces out over a year (or over terms in the case of student accommodation) is Revenue’s highly accessible Rent a Room Relief scheme.
€14,000 of gross income (before expenses) is tax-exempt and does not require the payment of PRSI or the Universal Social Charge (USC).
The payments are entered on Form 11 (ROS).
It’s not always worth claiming on the scheme for small amounts of just a few weeks rental that might be claimed in the generous genuine wear-and-tear allowances and other rental expenses allowable on your tax return.
There’s a good primer at revenue.ie.
It’s important to note that the rooms, even a self-contained flat, must be within the building or attached to the building (for example a garage conversion).
Rent a Room Relief won’t apply to a habitable, detached structure on your home property.
There’s such a wide variety of potential jobs that could be carried out from home.
Having reasonable broadband, video conferencing, cloud technology, secure authorisation and access to company tools, can place you at the house rather than in the office.
Still, once there the utility bills will inevitably rise especially in winter, so ensure you are offsetting any increased spend with a save on commuting and a better work/life balance.
We’ve explored the potential of remote working for a company from home through “knowledge jobs” previously.
Next there’s the issue of the Certificate of Lawful Use to deal with.
This sounds scarier than it is, and if you have a detached studio building in the garden for example where you intend to work quietly, largely taking small meetings and riding the telephone as some sort of business consultant, for example, there should be no problem.
The planning authorities are interested in “whether the overall character of the dwelling will change as a result of the business”.
There’s also the understanding that the property is primarily a home not a business address. Prove a “nuisance” to surrounding residents or those using your road network, and matters can take a serious turn.
If there’s traffic backing up the road, loud activity not expected in a residential area or groups of individuals hanging around at all hours of the day chanting to the moon the neighbours will probably (and understandably) act up.
It’s important to engage with your local authority if you have any doubts about the impact of your enterprise now and as it develops.
Check with your building and contents insurance, and alert your mortgage holder if you intend to set up a business at home, as this may not be contained in your current policy and may invalidate insurance cover if something goes horribly wrong.
The area of revenue and home businesses can also be tricky and a tax specialist should talk you through claiming expenses and any potential pitfalls for any self-employed adventure.
Some industries obligate you to regulation and inspection — for example Tusla overseas the entire area of pre-school childcare.
Small food producers are also scrutinised through specific legislation. Try this introduction from the Food Safety Authority: fsai.ie/food_businesses/starting_business.html.
Keep in mind that no-one should take ill-considered personal, legal or financial risks with their house or flat — it’s your home first and foremost.
If you bring work into the home — everyone living there is going to be involved at some level.
This has to be a family discussion from the get-go.