Renting out an un-used room has become an attractive and popular way to earn a little extra cash each month, especially since the economic downturn. However, don’t be fooled. Renting out a room can be a lot of work and stressful if you’re not prepared. Here are some tips to get it just right:
Make Sure Everyone is On Board
Before you decide to search for a tenant, make sure you and your family are comfortable with having a renter in the house. If you have multiple pets or small children, having a renter may not be the best option for you.
Additionally, if you are a very private person and the room in your home doesn’t have separate living spaces and entrances, you may not want to rent it out.
If either of these situations apply to you, you should consider whether giving up some space and possibly some privacy in your home, is outweighed by the income you will be receiving by renting out the space.
Spent Time Researching the Tenant
After you’ve decided to rent the space, you must find a suitable tenant. The first thing to remember when renting out a room is that the relationship with your “tenant” is NOT a personal relationship; it’s a business relationship, regardless of if you already knew them personally.
It’s also a good idea to avoid renting to someone you care about, like close friends or family, if you can. While it may seem scary to rent to a stranger, renting to friends or family can really put stressors on your personal relationship if there are problems with them respecting your home and common areas.
Before you select a tenant to rent to, you should check out their references from past places they’ve rented. You should also have a standard rental agreement (contract) that you both go through together to lay out the rules from the very beginning, like quiet hours, overnight guest policy, common spaces, and rules about pets. You should both sign and retain a copy of the document. A rental timeframe should also be stated in the contract, no matter if it’s a 12-month lease or a month-to-month arrangement it should be spelled out for both parties.
Make sure both parties involved in this living situation, you as the landlord and the tenant, are comfortable with all terms of the contract and the living situation. You should also take all steps necessary to protect yourself legally in case you should have to “evict” your tenant. Some states also have special tax laws and rules for the income generated by renting out a room, so be sure you know these before renting out a room.
Ultimately, renting out a room can be a great way to make some extra money each month but if you’re not prepared and don’t do your homework, it could result in a really stressful situation. So, take your time to find the right tenant for you and good luck!
