6 Tips On How To Rent Out A Room In Your House

By Ronald Kimmons. May 7th 2016

If you have a spare room in your house, renting it to someone else can be a good way of earning some extra cash every month. It can also help you cover part of your own rent or loan payments. However, before going through with your plan to take on a renter, you should be mindful of several important things. Bringing someone else into the privacy of your own abode can be a somewhat risky maneuver so it’s important to do your homework first. Keep the following tips in mind if you are thinking about renting out a room in your house.

Review Your Mortgage Agreement

If you are still making payments on your mortgage, review your mortgage agreement. Some mortgage agreements do not allow homeowners to take on renters at all. Others allow them to do so, but only under certain conditions. You could face legal or financial repercussions if you are in violation of your mortgage agreement so make sure you are clear on the details before proceeding.

Find A Trustworthy Tenant

When it comes to finding a tenant for a room in your home, it is always best to work within the circles of who you know first. Renting out property to a tenant always means engaging in a relationship of trust and this is particularly true when it comes to renting out a spare room in your own house. This person will be in your house throughout the night, every night. This person will be around your family every day. Talk to friends and family to find someone you can trust who is looking for a place to stay. If that proves ineffective, advertise locally, but carry out a screening process. Interview potential tenants over the phone and bring in the ones who seem to be the best candidates for an in-person interview. Look for someone who is personable and who has a clean background.

Get It In Writing

Regardless of how close you may or may not be to your tenant, write up an agreement for both of you to sign. This agreement should address the following:

  • Agreement Duration. Whether you are agreeing to let the tenant stay for six months, a year or two years, this must be specified.
  • All Fees And Payments. This includes the rent itself as well as anything you may charge for food or utilities.
  • The Use Of Appliances. Many people are not keen on excessively loud televisions or radios. Also bear in mind that some tenants may have the bright idea of trying to install things like ovens, stoves, air conditioning units and refrigerators into their rooms.
  • The Times During Which Other Rooms In The House May Be Used. You may not want your tenant watching television in the family room at 3:00 in the morning on a school day.
  • The Tenant’s Financial Responsibility For Any Damages To Property. If the tenant scrapes walls, breaks doors or breaks your appliances, this could become an issue.
  • Visiting Hours For Boyfriends/Girlfriends And Others. Whether you have issues with this or not, you should put it in black and white.
  • Meals And Use Of The Kitchen. If you do not want your tenant cooking in the bedroom, you should probably make it clear whether you will be doing the cooking or not. If not, stipulate when and how the tenant may use the kitchen.
  • Any Regular Responsibilities The Tenant May Have. Such as cleaning the bathroom every week.
  • Sanitation Requirements For The Tenant’s Room Itself. If mysterious odors start emanating from the room, you will wish you had something to this effect in the agreement.
  • Internet Use. Can your tenant piggyback on your Wi-Fi? If not, can your tenant get a separate line installed?
  • Telephone Use. You probably do not want your tenant making daily calls to a friend in Botswana or Nepal on your telephone.
  • Pets. Some people may feel that they cannot live without their pets while you may feel that you cannot live with them. Make sure to clear this issue up before the Chihuahua eats through the back of your couch.
  • Terms For Eviction. Clearly lay out the terms under which you may evict this person from the room.
  • Parking. If your tenant has a vehicle, he or she will probably expect to be able to park it somewhere nearby. Clearly state where the tenant’s vehicle is to be parked as this will help to avoid awkward situations in which someone’s vehicle is blocking in someone else’s vehicle.

Make Sure Your Tenant Is Insured

If you have homeowner’s insurance – which you should – your insurance company has probably insured you with the understanding that your household consists of your immediate family as initially reported to them. Your insurance contract may not cover losses inflicted on or resulting from a tenant. To get coverage for such hazards, you will probably need to contact your insurance company and pay a little extra. (For more information on how to get home insurance, see 9 Tips On How To Buy A Home Insurance Policy.)

Investigate The Relevant Legal Issues

Laws regarding eviction differ from one place to another. Where you live, once you have welcomed a tenant into your home, certain laws may protect this person from easy eviction regardless of whether or not you have a written agreement. Research the rental and eviction laws specific to your area to make sure that the renting agreement itself is not in breach of any law and that you will be able to evict the tenant as agreed if he or she breaks the rules outlined in the agreement.

Another issue to take into consideration is anti-discrimination laws. When you go through the process of choosing from among a group of tenants, various anti-discrimination laws do not allow you to refuse them on certain grounds such as their religion or ethnicity. If you do reject a prospective tenant on legitimate grounds – such as financial instability – you should make a record of it. In that way, you can protect yourself from allegations of illegal activity.

As for taxes, remember that your rental income is taxable. However, expenses directly tied to your rental activities – such as repairs resulting from the use of the property by the tenant – can also count as deductions. (To learn more about landlord tax breaks, see 9 Rental Property Tax Deductions For Landlords.)

Maintain Good Personal Relationships

In general, renting a room in your house is not the same as renting other types of property. Having someone living with you usually leads to close personal relationships. Make sure to be respectful and friendly and expect your tenant to do the same.

If you are planning on renting out a room in your house, keep these tips in mind. They could help you to avoid common rental pitfalls down the road.


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