Recurring revenue stories – the rent a room scheme UK

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Recurring revenue from lodgers UK - my story. Photo showing a bedroom

My passive income story – the rent a room scheme

It’s true to say that my journey into passive income has been squiggly. In the beginning, it was borne out of necessity. I had been laid off – it was 2008, and the recession had hit industries like fabrication. 

Long story short, I had quit teaching 3 years before and was working as a CADCAM operator, preparing drawings for a laser machine to cut. 

So I was 26 and terrified. I had a mortgage to pay, and I didn’t want my poor dad to bail me out, as I could sense he had little cash himself. (He totally would have bless, him, but I didn’t want any more stress for him) 

The rent a room scheme in the UK 

The rent a room idea was an absolute game-changer. I’d followed Martin Lewis online for a while, and he suggested that if you needed up to £7500 tax-free cash a year, why not rent your room out? 

Here’s more information about the scheme in 2023 

I had not just one but two rooms I could rent out in my house. 

I’ve even been able to access my original listing on for you to see. 

Spare room listing that I used to make recurring revenue

How easy is it to rent out your spare room? 

I found it really easy because all I had to do was clean up the rooms and then source 2nd hand furniture to ensure each housemate had the basics. 

Then I listed exactly what I did and didn’t want on

Is renting your spare room genuinely passive income? 

I don’t think any brilliant source of income is completely passive. That’s why I agree with Lisa Johnson and call it recurring revenue. I had to do some work to clean the rooms up, ensure the rooms were furnished and gave privacy. So the costs to do this came to a total of about £200. 

Things to consider when renting out your spare room for recurring revenue

House rules 

You need to write a set of reasonable house rules that will ensure everyone lives in harmony. After all, you don’t want to be the person your neighbours complain to if your housemates regularly disturb them. 

In my experience, I never had to refer back to them. 

Meet with them first 

Before I offered a housemate a room, I would insist on meeting them. That way, I could see if I got on with them. Getting a housemate happened quickly, as my first lodger was Laura, who I already knew. 

But when advertising for a new housemate, I had to figure out who would be the best fit. The meeting with Marina proved that it is essential to meet with them. We got on from the first minute and had an awesome time!

Adding to your household 

If I already had a housemate, I encouraged them to be there also, so we could make a joint decision on who we invited into our shared home. Between you, you usually get a good feel for who may be an excellent fit for joining you. 

Marina helped me out when we interviewed Mark, and it turned out that we all got on really well – even though Mark was a little crazy! It was so much fun! 

Have a housemate contract and house rules document for them to sign 

This way, if it is not working out, you have an out. The type of contract you will use depends on what you allow your lodger to share within your house. Check out more info here. 

My lodgers have always been termed as excluded occupiers, meaning they lived in my home and shared a kitchen, bathroom, plus living room with me.

They paid me monthly, so I had to give them a month’s notice to end their contract if necessary. More info on giving reasonable notice to quit here 

 I used a contract available for free online and modified it as suggested. Many local councils list lodger templates on their websites. I want to make it clear here that I’m not a lawyer, so I can’t give advice. If there’s anything specific you need to check when you are creating a contract, please contact a professional. 

Consider safety for you and other housemates 

Before I invited any housemates to share my house, I fitted locks to all bedroom and bathroom doors to ensure all housemates could feel safe, regardless of who they were living with. 

It sounds over the top, but sometimes a person may not be who you thought they were. Doing this before they moved in ensured I didn’t need to have any awkward conversations about this, but they had a choice of whether to use the locks. 

Simple safety precautions served us well because, at one point, we didn’t feel comfortable with a housemate. 

Marina and I locked ourselves in our rooms on the evening in question. We only found out that both of us had done this afterwards. 

The housemate had given us a weird feeling, and I was about to give him notice the next day, but he’d already texted me to say he was moving out. Phew. 

Housemates bring so much more than money 

Helen and Marina her lodger who helped Helen create recurring revenue

Sounds like we were getting quite deep. On a lighter note, lodgers can bring great joy to your house. 

I wasn’t bargaining for just how much Marina would lift my spirits when I was facing so much uncertainty. ⁠I had the huge worry over how to pay the bills without a steady job. 

How much she would bring that, I won’t ever forget.

⁠It was beyond the money.

It was a passion for life, and the joy she took in things has never left me. ⁠She helped me have fun whilst I was creased up worrying about money. ⁠It didn’t take much to welcome Marina into my world. Just a bedroom upgrade and a relaxed living atmosphere. ⁠

Take a look at the photos below. I recommend it to anyone with a spare room. It brought me back to life again and, of course, eased my money worries. 

⁠In conclusion

In summary, renting out your spare room is a really easy way to create a stream of recurring revenue in your life. You can earn up to £7500 tax-free (if it’s only you) and £3750 if it’s not only you that will benefit from the income, e.g. if you jointly own a property with your spouse or partner. It has been the difference between me paying the bills and not, and saved me a lot of anxiety at a time when paying my mortgage looked unlikely. 

As always, if you have any questions about renting out your spare room, feel free to comment or email me at 

Want to learn more about creating other streams of passive income, semi-passive income or recurring revenue? 

Why not join my friend and business mentor Lisa Johnson’s free challenge? 

Race to Recurring Revenue challenge 2024 Lisa Johnson

Starts Monday February 26th 👇🏼

I’m partnering with Lisa to bring you this because I only promote things that bring many people results. I will make a commission if you use this link. ✨ 

Register via my link  https://hnuttallcopy–

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