Sunday 20 August 2017

'The living room is out of bounds': Could renting your spare room pay off your mortgage?

With a shortage of student digs and a new Government tax incentive for landlords, now is the best time to get more bang for your buck by renting out a room

Digging it: Laura Farrington rents out a spare room in her home to third-level students to supplement her mortgage repayments. Photo: Gerry Mooney
Digging it: Laura Farrington rents out a spare room in her home to third-level students to supplement her mortgage repayments. Photo: Gerry Mooney

Tanya Sweeney

Picture in your mind's eye a third-level student, and it's likely that you've conjured up a slightly uneasy picture featuring lie-ins, cider cans, Pot Noodles and not a lot of Cillit Bang. Students have endured a bad rap for years, but given a recent tweak in the budget, they could hold the key to financial comfort for homeowners.

This year, the amount that one can earn tax-free on the rent-a-room scheme has increased from €12,000 to €14,000. It's a timely turn of events, given that students have had a task on their hands trying to find suitable accommodation this year.

According to Daft.ie, in early August 2016 there were 87 properties available to rent in Cork city - 1,000 fewer than on the same day six years ago.

And so thoughts turn to the humble digs system, which has long been an Irish institution. Homeowners would rent out to students on Monday to Friday, with the unspoken agreement often in place that they would return to their home county on the weekends. The cooking was basic, the room doubly so, but digs were preferable to a commute from rural Ireland. Yet the idea of digs fell somewhat out of fashion down the years, on the part of student and homeowner alike.

Figures show that while 10pc of Irish students stayed in digs in 2000, the figure dropped to 2pc in 2006.

Yet according to Dr Brian Gormley, head of campus life at DIT, all indications show that the figure has "increased dramatically" since then.

"Homeowners are increasingly looking into the digs option," he says. "Many of my city centre neighbours rent out rooms to students. Students have a kind of antiquated view around digs, and worry about not having the freedom and independence they'd have if they rented on their own. But in reality, that's not the experience that they have. Survey results show that students who live in digs are happier than those who live in independent accommodation. And why not? Meals and utilities are often looked after, and the houses are warm and well kept, which might not be the case in a private rental. It's a win-win."

And a growing number of people are realising the merits in not just a tax-free cash injection, but some younger and spirited company to boot.

Laura Farrington lives in Irishtown, Dublin 4, and has recently moved into a promising new career as a personal trainer. But amid a momentous career switch, one thing has weighed heavily on her mind: the mortgage on her three-bedroom house.

"I'd had issues with roommates before, and I did Airbnb, but it was more work than I wanted to give," she admits. "I didn't want to come home on a Friday night to have housemates drinking and smoking in the living room, which would absolutely be their right. Part of me didn't want to rent out a room at all, but I wanted to afford my mortgage."

A friend of a friend mentioned hostingpower.ie, a site that connects homeowners to students.

"It seemed the best choice that suited my lifestyle," says Laura. "I wanted independent students that wouldn't be hanging around the house all the time. My boyfriend and I were allowed to state that certain parts of the house, like the living room, were out of bounds, so we have that space in the house. I can't believe I didn't do it sooner. It's quite easy money."

Initially, Laura was cynical of the idea: "My mum rented rooms out to students when I was younger and I hated it. It was such an invasion, having to cook for these people and make an effort. It wasn't something I wanted to do."

Thanks to the site, Laura could create an arrangement that suited her, and this meant that she doesn't need to cook meals for the students that live with her. Ground rules are also set out through the website before each student moves in.

"It's been really fantastic as they're so independent," she explains. "There are no issues around the kitchen, no queues at the bathroom.

"They're both in their finals so they have the head down," she adds. "They're usually out and about, often at the gym."

With everyone in the mix pleased with the arrangement, Laura admits that the cash injection has been a boon.

"I've just come back from a trip in India, and I can start my new career under no financial pressure," she says. "The mortgage is taken care of, food is paid for and I've a bit left over. It's great not to have to worry about any of that right now."

Paula Noone, a housewife from Artane in Dublin, has a similar happy ending. Entirely by happenstance, Paula noticed that a young friend was looking for accommodation on Facebook.

"She was stuck, and I had a room, so I thought, 'Why not?'" she recalls. "I loved having them. My children and grandchildren live their own lives, so I was pleased to be having the company."

Now on her third student, a French girl (previously, she hosted two Italian students), Paula offers a traditional digs arrangement, albeit with a twist: "I offer the student a bedroom and we occasionally sit and eat. They're welcome to food if it's there, although they often cook for themselves.

"I don't have any ground rules, and we like them to treat the house as if it's their home," she adds. "Once they can feel part of the family, they treat the place very well."

Thus far, Paula hasn't experienced 'typical' student behaviour, although has had reason to be maternal towards her charges: "The girl I have now isn't a big socialiser, and she wants to see more of Ireland so she's out a lot. The other girl I had before used to play music and would go to the International Bar for gigs. I'd have to remind her to be careful coming home."

Paula can easily see the benefits of a digs arrangement for homeowners and students alike: "A lot of students rent horrible places, and this way, they get to come home to a warm house where they have food, and they're safe. It's great to be able to just sit and have a conversation with someone. That's why I would say to a widow living on her own, this is a great idea. It means there's a few bob around, and always someone in the house."

Marie Reidy recently waved her youngest child, aged 24, off into the big bad world, and has welcomed NUI Maynooth students into her home in Celbridge, Kildare for three years.

"The number one reason was financial, but I didn't want a houseshare situation," the teacher explains. "They're gone in the summer, and if they're Irish they're gone on the weekends.

"Ninety per cent of the time, the parents will ring about the house," she says.

For Marie, a balance should be struck between offering support and allowing youngsters to become independent. "I never let them eat by themselves," she notes. "I think a lot of people might be a bit 'go to your room, I don't want to see you', but I find they're not around too much in the first place.

"These particular girls don't really go out (socialising) but I'd say to students, 'if you're not coming home, just send me a text if you're staying out'. It's not necessarily in a motherly way, but more in the way that if your housemates didn't come home, you'd expect to hear from them."

Currently, Marie rents to a young Iranian student, and an Italian student.

"The Iranian girl's brother arranged her digs, and initially she wanted to live by herself, but she has said to me, 'I'm so glad I live with a family who cooks for me'. She has a friend living on campus who isn't quite as happy.

"For me, it's great as I get to learn about other cultures. We sit and have dinner together almost every night, and it's nice to just sit and talk. I'm learning how to make Persian food now as it's nice to be able to give them meals from their own country."

THE DOS AND DON'TS OF RENTING A ROOM AS DIGS

A guide for landlords

• Use a site like hostingpower.ie, which vets students using an ID and credit card check.

• If quietude is your thing, try looking for a mature student or someone doing post-doctoral studies, as they will likely be more self-sufficient.

• Set out ground rules from the outset: don't be afraid to tell your tenant that you'd like to make a family meal at a certain time each day, or that you and your family will need the bathroom at a fixed point.

• A little hospitality goes a long way, so be prepared on occasion to share your common areas like sitting rooms.

A guide for students

• Don't let Mammy do all the spadework. Meet the homeowner of the digs yourself and get a feel of the space.

• Make sure there is Wifi.

• The set up: You have a room in a family home and meals - generally breakfast and dinner - will be provided. If you are unsure about boundaries, talk it through with your landlord and hammer out some house rules.

• If the agreement is that you will be gone on weekends, stick to that as faithfully as you can.

• The point is that digs is meant to resemble home, which is ideal for those nervous about moving away for the first time. Don't take this literally, mind. This, alas, doesn't give you licence to lie splayed on the couch every evening or drink directly from the milk carton.

Irish Independent

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