New data shows that many homeowners could earn at least $10,000 a year by renting out their spare room.
According to Domain, there are about 7 million extra rooms in owner-occupied homes across Australia that can be rented out based on a study conducted by Finder.com.au. Many of these homeowners can earn extra cash like Jodie Humphries, 30, who is getting an extra $200 a week in rent from her tenant or flat mate. They have also agreed to share the electricity bill. She bought her two-bedroom Dee Why flat in 2014 for more than $500,000.
Humphries said, "Before I bought I sat down and worked out a budget to make sure I could afford everything on my own." Renting out the spare room in her house was a good idea after all because there were times when she had to make ends meet. "It's a way, particularly in the expensive Sydney market where the cost of living is out of control, to have a financial cushion."
Meanwhile, according to Flatmates.com.au the average weekly rental cost of one room in Adelaide is around $169. Canberra, Perth and Brisbane are at $192, $194 and $196 respectively. In Melbourne, the average weekly rental cost of one room is at $210 and as expected Sydney has the highest at $283.
Homeowners who want to rent out their spare rooms, they should remember to include the rental income in filing tax returns according to Jeremy Iannuzzelli from Keshab Chartered Accountants and VJR & Associates. He adds that income deduction for associated expenses, such as the interest on the housing loan may also be claimed. Furthermore, Iannuzzelli reminds that when claiming deductions, only expenses related to that rental income from that part of the house should be included. Lastly, when the rent is lower than the market rate, the deductions may also be limited.
