Philly Garrett, a 34-year-old homeowner in Reading, England, generates up to £18,000 (approximately $22,800 USD) per year by renting out spare rooms in her three-bedroom house. Garrett purchased the property in 2020 for £267,000 with the intention of housing lodgers to help cover costs. She subsequently renovated the home, adding a fourth bedroom to maximize its rental potential.
Garrett currently lives with two lodgers, generating £1,550 per month, which amounts to £18,600 annually. The first £7,500 of this income is tax-free under the UK's rent-a-room scheme. She stated that the revenue from renting rooms has significantly exceeded her renovation expenses, making the investment worthwhile. Her property's value has increased to £415,000 since the renovations, and the income from lodgers has allowed her to focus on building her business without the pressure of mortgage payments.
"It was always the plan, as I didn't need a three-bedroom house just for myself at this stage in my life," Garrett explained. "Owning a home and having a complete choice of lodger feels the most stable. And renting spare rooms out helps with the housing shortage, by using houses to their full capacity."
To prepare her home for lodgers, Garrett replaced carpets with hard flooring in the rented bedrooms and ensured ample cupboard space in the kitchen for individual storage. She also added designated storage in the bathroom to maintain tidiness. Garrett's longest-term lodger has resided with her for two and a half years, while she has also hosted short-term lodgers.
She employs a selective approach to choosing lodgers, preferring individuals who do not work from home. This includes professionals such as teachers, film crew members, and nurses, ensuring the house is available during the day for her use. "You can choose your own criteria to suit your lifestyle. We [my lodgers and I] have chats, and have been out for Sunday roasts on occasions, but generally we have our own busy lives going on," she said.
Following a job loss in 2024, Garrett launched Cucoon, an online platform designed to assist single professionals in co-buying their first homes, providing legal and practical safeguards. This venture was inspired by her own difficulties in entering the property market, which necessitated moving out of London despite having a £40,000 deposit, and observing friends successfully engage in co-buying.
Garrett mentioned that while she does not anticipate having lodgers indefinitely, she advocates for the practice as a means of financial support, particularly for managing mortgage payments. She envisions a future where, upon starting a family, she will be in a stronger financial position due to property appreciation and mortgage reduction gained during her time with lodgers. "Buying a house was the best financial decision I have ever made," she stated.