In today’s world, the idea of letting a complete stranger rent a room in your home may sound a little crazy.
However, there are plenty of homeowners who choose to do just that.
In fact, those who live in large cities, like New York or San Francisco, sometimes don’t have a choice if they want to be able to afford city living.
Since the cost of living seems to continually be on the rise, the ability to rent an apartment or home on your own has become increasingly difficult, if not impossible, in some areas.
On the other hand, maybe being able to afford your rent or house payment isn’t an issue, but you’d love the extra cash to add to your savings, pay off debt, or fund an annual vacation.
This is the situation I was in before I decided to rent out a room in my home.
Either way, the idea of taking in a renter may sound more and more like a great idea. But before you put out an ad, you’ll want to carefully consider whether or not taking in a renter is the right move for you.
Here are some things to think about before taking in a tenant.
Be Aware of Laws
While renting out a room in your home may not sound like a big deal, you’ll be acquiring more responsibility as a landlord than you may know.
You should first look at your local laws to make sure you’re even allowed to rent out a room, as some states and cities prohibit the process entirely.
Next, carefully examine your state’s landlord-tenant laws. Everywhere is different and it’s important to know whether or not you’d be comfortable dealing with certain things should they ever come up.
There are certain laws, like giving 24-hours notice before entering your tenants room, that you may not be aware of, which could ultimately put you in legal trouble quicker than you’d realize.
Evaluate Your Space
Another thing you should evaluate before you put out an ad is the space or rooms you have available to rent.
Take into consideration the variables of each room. Is the room spacious enough for someone to fit all their belongings in? Does it have a private bath?
If not, consider whether or not you’d be okay sharing your bathroom or having that person use the hall bath. If you don’t like that idea, you may want to reconsider taking in a renter.
For me, the basement space has become the main domain for my tenant. But another thing that helped was that my renter is my brother, someone I know well and feel comfortable around.
Know Your Boundaries & Your Personality
You should also take time to examine yourself and your personal habits before you take in a renter. Figure out the things you would consider deal breakers in a tenant.
For example, ask yourself if you can live with someone you may not already know. If that fact unnerves you, you may want to find another way to make extra cash, or search for a renter you already know.
Ask yourself what qualities you’d like in a tenant. Do you want someone who’s quiet and does their own thing, or would you be okay with someone who might play loud music and have friends over frequently?
What about pets; are you open to your tenant having a pet, or would you turn down an applicant that had one?
Furthermore, take time to consider any issues that would bother you. Certain habits or behaviors may not warrant you asking someone to leave, so you should ask yourself whether or not you could handle someone else’s habits that you may not necessarily agree with.
Overall, if you find living with someone else easily doable, a tenant may be a good option, but if an array of habits and personalities annoy you, you may find it more stressful than it’s worth to take in a renter.Want to earn extra money by renting your room out? Consider these 6 factors Click To Tweet
Consider The Income
The bigger the space or the more private, the better price you’ll be able to get when you take in a renter. Moreover, you should take a look at similar rooms up for rent in your area to see what they go for.
That way you can find out ahead of time if what you’d like to make off the rent is reasonable or not. You should also consider the fact that rent is taxable income.
Once you’ve figured out the total extra income you’d be making, decide whether or not the process is worth it. Again, it’s not as easy of a process as you may think, so if you aren’t going to make what you were hoping for, the hassle may not be worth it.
Your Property Could Be Damaged
Apart from clashing with another individual, consider the possible effect renting out a room could have on your home.
The space you rent out won’t be just yours anymore, and the renter can do pretty much as they please. That said, renting out a room opens your home up to potential damage, whether that be from normal wear and tear, spills and stains, nail holes, broken appliances, or a variety of other things, especially if the renter has a pet.
And although you will be receiving rent money and a security deposit, you may end up putting that money back into home repairs instead of using it to pad your budget as you had hoped.
Consider the Benefits
Lastly, consider how taking in a renter might benefit you. Although you’ll get taxed on the income, you’ll profit from the majority of the rent money if you rent out a room in your own home.
And, while the tenant could potentially be the cause of damages, if they’re not, you’ll also have extra income for any home repairs you may need in the future. Plus, having a renter could help you pay a portion of an expensive rent or mortgage.
Taking in a renter has the potential to be a great way to earn extra income without much work. However, it isn’t necessarily something you should jump the gun with or take lightly.
Instead, you need to carefully consider what having a tenant will mean and decide whether or not it’s right for you and your home. If the benefits outweigh the cons for your situation, then it may be time to put an ad out and take in a renter.
Have you ever considered trying to take in a renter? Have you actually rented out a room in your house? What are the pros and cons for you?