Rent out house and move back home?

B

Babycakes

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Hi All,

My friend owns a 3 bed house and rents out the Master room to one other person. Due to family commitments, she ends up staying at home with her parents 5/7 nights a week so her lodger pretty much has the use of the whole house for the price of a room. The lodgers GF has more or less moved in...
My friend pays the balance of the Mortgage.

Recently my friend is considering moving home altogether and renting out the house in full but my thoughts on this would be:

1. She will be turning her PPR into an investment property & will be subject to CGT on selling (which is her plan in 2/3 yrs time)

2. She should continue to live there - in the box room, and rent out the 2nd Double room and avail of the Rent a Room scheme. Renting 2 rooms will help towards the Mortgage.

Would anyone have any more advise, pros or cons for this about situation.

Thanks in Advance :)
 
My thought would be that she would be better to keep the box room and keep it as her ppr. However she needs to get on top of this situation where a girlfriend has moved in practically. I think she would be better renting out the other room to a total stranger and not making her ppr a very cheap house for the other two to come and go as they please.
Obviously all this depends on how long she has the house, what equity she has built up and if there is demand for rental in the area.
It sounds as if she is busy with home so would she have the time and energy to be a landlord? Also by keeping the room and using it, even if its only two days a week, she is there looking after her property and she has a bolt hole when she needs a break from home. She can earn a good lot tax free with the rent a room scheme and keep her interest relief. If she changes to a n investment situation what happens if she can't rent at all. With the rent a room scheme she also has more control over who lives in her house.
I must add that this is only my opinion and to be honest she should get professional tax advise before she does anything .
 
What's Revenues definition of a PPR? Would staying there a max of 2 days a week meet the requirement?

Don't forget the limit on Rent A Room. Would this be exceeded by renting out 2 rooms?
 
Yes, would have no problem renting out the other room or the house in full and would remain within the limit even with the 2 rooms rented.

Dont think revenue matter in this situation as it is actually her PPR - its just that she is unable to get home some evenings as planned.

She currently stays in the boxroom as it is.
 
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