Last month, Alison from Diamond-Cut Life shared a guest post about providing lodging to a housemate in exchange for work (instead of rent). Her story prompted a number of readers to ask about the mechanics and practicalities of actually renting an extra room to generate income. For example, Penny wrote with the following:
In August, my brother-in-law moved in with us. By December, he couldn’t find a job, so moved back out. While I had mixed emotions about his leaving, I did lament losing the potential income, because I thought my husband would never agree to renting a room to a stranger. Imagine my surprise when I mentioned the idea and he agreed to it.
I need some advice as to some things we should consider when finding a renter.
- What would be the best way to charge for rent? Flat monthly rate with utilities included? Weekly rate plus a third of the utilities? In our immediate area, rooms rent for $485-500 with utilities, or $125/week plus a portion of the utilities. I’m torn between the two modes.
- What sort of keywords should I put in the advertisement that would help find the right fit?
- How would food work? I don’t mind cooking for everyone; in fact, I love it, but I don’t want to pay for all of their board.
- Any other suggestions? Am I being too specific?
Our situation is a bit unusual, because we’re sort of urban homesteaders. We have gardens all over our small yard. We don’t use the dryer or the air conditioner. We use wood heat in the winter. Our family hunts and fishes. Will these things matter?
I’m curious about this, too. I don’t know anyone who has ever rented out a room, so I don’t know the process — and I don’t know if the income is worth the hassle. I do have friends, though, who have been on the other side, who have rented rooms from people in Penny’s position. During college, for example, my friend Andrew rented a room in a converted garage. But although the garage was attached to the house, but he didn’t interact much with the family he rented from.
If I were doing this, I’d check with my lawyer and accountant to be sure I was fulfilling my legal obligations, as well as protecting myself from possible problems.
I’d love to hear anecdotes from other readers. Have you ever rented out a spare room? Or have you ever been on the other side? Have you ever rented somebody else’s spare room? What did you learn from the experience? What advice would you give to somebody who was hoping to generate a little income by renting out space in their home, garage, or attic? And, finally, do you have any specific advice for Penny?
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* Find the landlord /tenant laws for your state (and city if they have it) and read up on what the rules are. You might find a book in the library covering your state or at least general rules.
* Get a written contract agreement with the renter and make sure it has all your rules in writing.
* Figure out all your rules in advance. Think about all possibilities. Do you want to allow smokers, pets, alcohol, stereo or tv after 10pm or before 7am, where is parking allowed, can they hang items on the walls, can they paint the room, can they have an aquarium, can they use the TV in the living room and if so how to share it, do you allow waterbeds, can their girlfriend/boyfriend ‘crash’ with them for a few days which turns into 8 months, is there a fee for late rent, do they have to do any chores and if so how frequent, will you vacuum their room for them or do they have to and how often. I’d make sure to put everything in writing and make it as comprehensive as you can. Yes it may turn out long but this stuff is all best to have in a written agreement BEFORE you rent.
* I’d do a month by month rather than week by week. Week by week is too short a period and you may end up with people coming and going too frequently and get too much turnover. And its good to have a full months rent at a time so you can plan better.
* I’d avoid cooking people meals on a formal basis. I think that will likely end up more hassle then it is worth to you.
* Remember that rent is income and you are legally required to report it to the IRS. Make sure to keep tack of the rent and all expenses for your tax records.
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We always charged a flat monthly fee that included utilities and some meals (see below), which was a necessary arrangement for a house with a small kitchen. We had two different boarder situations and each worked, depending on your renter’s schedule.
–The renter who worked business hours shared cooking responsibilities with us. She cooked one night a week; we cooked two. The rest were on your own. Her rent included those meals.
–The renter who worked nights didn’t participate in our meal-sharing schedule so it was no problem.
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If the brother in law is still without work, why not rent it out to him in exchange for household work? Might be awkward, but could definitely help him out.
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Trying to enforce a long list of rules is a good way to end up with an unhappy household. I have lived with roommates many times, although always in a shared apartment, never in a house I owned.
It only works OK when all parties involved respect each other and treat each other like adults. This is a person with which you are *sharing* a home. Yes, your name is on the title to the property, but they’re paying for the right to live there as much as you are. They will expect to be able to use the living room to watch TV, and the kitchen to make their breakfast, etc.
If you treat your tenants like children, by giving them curfews and complaining about how they don’t wash the dishes, they’re going to be angry, and your going to be angry, and no one’s going to get along.
An apartment rental agency can get away with this sort of thing, because the people that run the agency get to go home at night, and leave their problems at work. Maybe tomorrow at work they’ll have to deal with a noise complaint from one of their tenants, but that’s a lot different than being kept up all night by that noise.
And from the other side of the fence, the same principal applies. It’s easy to come home and complain about how the landlord won’t let you play your music at night, or have a cat, or whatever. But when your roommate *is* the landlord, then tensions grow and people get angry at one another.
When you get right down to it, shared housing is just that, shared. If you can’t share and compromise and realize that sometimes you’ll have to deal with the idiosyncrasies of the other people in your household *whether they pay rent or not*, then you’re all going to end up miserable.
I wouldn’t rent out a room in my house, because I don’t want to wait to do laundry because someone else is using the dryer. I don’t want to have to take a shower in cold water because someone else ran out the hot water. I don’t want to listen to The Late Show from the other room while I try to fall asleep.
These are things that you trade in exchange for rent, not simply space. You give up control of your household and agree to let someone else share that control with you. I used to be OK with trading these things for $400/month back in college, but now, I’m not.
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Definitely write a lease! In Australia you can get free advice on this from Consumer Affairs etc, don’t need a lawyer or anything.
It’s very important to understand your legal position if you need to throw them out, they damage something etc.
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Hello again, Having had some excellent housemates, I can offer tips on how I found them: http://www.diamondcutlife.org/top-ten-tips-for-living-with-others-part-i/
And here are tips on getting along with a housemate once you find him or her: http://www.diamondcutlife.org/top-ten-tips-for-living-with-others-part-ii/
As with many things, it can work great for some people, not for everyone.
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Hi All,
I subleted from a couple once. They charged me a set rate, ~500 a month, utilities included. They identified a place for my food, gave me space in the fridge. Allowed me use of the living room (dvd, games, etc.), kitchen (of course), and dining room.
What really worked:
- They each (both guy and gal) had their own office / personal space.
- My room was on a separate floor with the guest room.
- Bathroom was shared but we were on different time schedules (and they knew this when they “selected” me).
- “little things” Milk, tea, condiments were OK for me to use.
Almost no problems. I think a few times I left some food in the fridge too long
. I also learned a heck of a lot about coffee preparation and Dim Sum. Great Xp.
They remain friends today. We went to their wedding and I (with my wife) visit regularly.
cheers,
J.
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Our daughter needed to rent an apartment or a room for a summer for a summer internship that was too far from home to live at home. What we did was to contact a church in the area she was going to, to see if there might be someone willing to rent a room to her. There was. A divorced woman offered her a room to rent. They got along famously. I am not sure of the details, but the two were able to find each other in a way that protected each of them. We knew someone who had attended that church and knew the lady offering the room. In turn, this same person knew our daughter and could give info on her to the lady. My daughter had access to the kitchen and the two of them cooked for each other. Perhaps the people wanting to rent out the room has a church affiliation or a group that can help them find a suitable person to rent the room to.
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Renting out the spare room should be looked at as having a roommate. They should be treated that way both with bills and otherwise.
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When you have someone else live with you, you do lose privacy. To some people, that is important. We’ve had various people stay with us. This was the most important thing for me to remember! I’m like the few who said that the hassle wasn’t worth the difference in money/help around the house.
I’d definitely make more “space” that is your own. I also think it is amazing that you all could share your common space with basically strangers on a regular basis, including bathrooms, kitchen, refrigerators, and living areas. Wow. It’s hard enough to do so with people that you know well, but strangers…wow.
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I currently rent out a room in my 2 bedroom, 1 bath condo, and so far so good. I would definitely recommend going through your network of friends. That way, there is some system of personality check, and the renter may feel more inclined to respect your space if they feel they have a personal connection to you. My roommate pays $450 a month, plus half of utilities. Splitting utilities is KEY because that is going to be your largest variable expense. Unless you are willing to spend all your time policing your roommate’s energy consumption, I would highly suggestion this arrangement.
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I’ve rented out the spare bedroom in my condo to 3 people over 8 years, including the first year and a half of my marriage (right up ’til 3 months before the new baby was due…). It’s been great.
I’ve liked Craigslist as a way to find roommates – of course you want to meet people and learn a little about them, but in general I’ve had great luck that way.
I hate dividing up utilities, so I’ve tended to stick with a flat rate, but I do agree that you have to be willing to tolerate the renter wanting things warmer than your frugal self would usually pick… if I were going to do it again, I would probably have gas and electric be divided up after all.
Overall – I’ve had minimal problems, and really enjoyed the experience (and the $$ saved!). Good luck!
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Our city codes only allow two families per house – so no renting out several rooms.
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Not sure if this has already been mentioned, but… check your state’s laws regarding eviction. In many states, regardless of the length of your tenant’s lease, there are strict rules about how much notice you must give your tenant before asking them to move out. Don’t assume that because it’s your house you can ask your tenant to move out at the drop of a hat. In a “worst-case scenario” situation, you want to be prepared to do everything by the book to prevent more headaches.
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I rent out a few condos in Miami and Toronto and as I have helped others rent out places, I would suggest that if you are going to rent out a room, try a local graduate school.
One of my Miami condos is rented out to two female medical students and its been a perfect situation since both are mature, quiet and have the ability to pay.
Obviously you should prepare for a nightmare tenant but with a thorough checklist, can weed out potential problems.
Are you allowed to do credit checks? Ask for upfront 1st and last months rent. For my tenants, not only do I get a 1 month security deposit, they all give me 12 post dated chq in advance so I dont have to chase anyone down.
The big thing will to make up a contract before starting to look for tenants. Make sure you get all agreements/rules in writing and signed by both parties.
goodluck!
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I’ve been on both sides. After I left the military and had a divorce I was the tenant for a few years. After I bought a home much larger than my needs, I rented out two bedrooms and the basement.
Some roommates were very good and others were terrible. One stayed for less than two weeks, two others stayed for over a year. Overall, I found about a third of my roommates or landlords were boneheads. Several are still good friends.
After I was laid off during the dot-compost days, the extra money was very helpful.
The previous advice about a lease and house rules would have saved me some headaches.
Rent was based on the going rate for a studio apartment in the area and I never had any problems asking five hundred dollars a month. The home had a walkout basement looking over a gorgeous park with a pond. I provided wireless and wired internet access and even leased a public IP addresse to one roommate.
I preferred posting shared utility bills and evenly splitting them. Ubiquitous cellphones make landlines less of a problem these days, but a heavy telephone user gets their own line the first time I get burned.
One roommate had a great black lab. Another had a cat that urinated everywhere except the litter box. A returnable pet deposit is a very good idea.
It is much easier evicting a stranger than an acquaintance. However, the stranger’s very first rent check bounced. When the next check to cover the first also bounced, I let him have two days before installing new exterior locks. I allowed one “friend” to take advantage of me by failing to pay rent for months. I should have kicked him out the first week after missed rent.
One very useful tip- take a good look at a prospective renter’s vehicle. If it is a mess with layers of food wrappers, they will likely treat their living area the same.
Overall, the experience worked well for me and also taught a few valuable lessons.
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I’ve recently bought my first house, 3 bedrooms, and I was thinking of renting out 1 of them. In my view, unless you are a huge people person and love being around people all the time, renting out a room is pretty risky. What if you get a tenant whose personality doesn’t mesh with yours. What if you have nothing in common? Are you just going to ignore each other for the whole time they’re living there? What if they play their music too loud or have guests over all the time? It just creates a lot of problems if you don’t get a nice quiet tenant, and there’s really no way to screen for that. You can’t realistically have like a “test phase” of like 2 weeks where you see what their living style is like. No one would go for that. So, do you risk getting someone you don’t like as a tenant or do you not bother renting out your room? It’s a tough choice.
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//Don’t assume that because it’s your house you can ask your tenant to move out at the drop of a hat. //
Again, my brother has a handle on this kind of situation – he goes to them and says, “listen, this isn’t working out for either of us. If you leave now, within the next day, I’ll give you your security deposit back plus any from now until the end of the month”… they always move out. Simple. He gets a bit of a hit financially, but he usually isn’t without a renter for more than a day or two, and usually then the renter is a better one.
Just because you can’t kick someone out, doesn’t mean you can’t “get” them out. Money always works.
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My maternal grandparents bought a large home back in 1947 and to help pay for it took in boarders. With my grandmother working part time and cooking for a family of 4 plus supper for 3 renters she was a busy woman. It can be done but aggrements must be setteled on ahead of time.
Having the large house was a blessing as there was enough room that people were not bumping into one another. Also all the renters were older (one was my great-grandfather) and didnt raise hell at all times of the night.
Renting out a room can be a very good way to help get a house payed off, just have all your ducks in a row when you decide to do it. My grandparents and a good friend of mine booth went that route and it worked out well for all of them, but they were also picky about who they rented out to.
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I’ve had several years of experience as a landlord/homeowner, renting an unfurnished house, a furnished duplex, and a room to a tenant/room mate. I’ve also taken one tenant to court, and had a ruling in my favor, because I had excellent documentation and evidence for my case. So these experiences are the basis for my following comments.
Background checks:
Don’t waste your time or money. This will only identify “criminals” who have been reported and caught. Rely instead on your intuition and life experience to assess personalities and integrity, based on face-to-face interviewing (I like the dinner idea too), and other evidence of the prospective tenants’ lifestyle and credibility. One of the best tests for this is to create an opportunity for you to drop off an application, or information sheet, or something at their current residence, so you can get an idea of the way they live (the aforementioned car assessment also sounds like a good one).
Legal consultation:
I wouldn’t spend my money on this service either, unless you strongly feel you need it for your own peace of mind (that can justifiably trump other logic and frugal values). If you have your terms clearly stated and agreed upon, you will be sufficiently covered. I would not rely on standard templates of leases or rental agreements. They lack most of the details that are potential items of contention. The attorney I hired for my one and only court case told me that my rental agreement was the best she had ever seen.
Bookkeeping and Tax Records:
You can do this yourself, if you are comfortable doing your own taxes. Tax preparation programs can help. I use Intuit’s Rental Property Manager program. Even though I would be perfectly capable of doing the accounting myself, I use a CPA (just because I despise doing taxes, and I also appreciate the peace of mind factor). Of greater importance is keeping good records of your rental-related expenses. One change I’ve made recently is to separate my purchases of items that I use at home from the same items that I use for rental purposes. Include paper products, cleaning supplies, lightbulbs, vacuum cleaner bags, printer paper, postage, keys, window treatments. It’s easy to overlook these costs as incidentals, but they add up more quickly than you’d imagine.
House rules:
I would write up the details of designated space usage, scheduling issues, levels of cleanliness, visitors and such, the way you would if you were running a camp. There are excellent suggestions from other commenters, but walk through your house to help you identify things from a shared room mate perspective. Also, include yourself in the rules. You may even want to adjust the agreed rules with your tenant, with their input. That might be a good way to determine preferences for handling consumables, food, and shared meals, which may differ, depending on the tenant. The idea is to get consensus before there’s an issue, so that each occupant of the house knows what’s expected of them and what to expect of others.
Communications:
I’ve had good success with having a posted message center (mine has a couple compartments and a place for slide-in name labels). It’s a good way to communicate messages when occupants are on different schedules or often passing each other on the way in or out. It works for leaving a note about something when it occurs to you without having to remember to say something when you see each other. Another benefit of this system is that you can use it to write calm notes about awkward issues that you may be reluctant to address in person.
Documentation:
Keep a folder with your rental agreements, tenant information (for forwarding mail, returning their deposit, or calling them about whatever may come up after they leave), and other receipts, documents, and such. Also start a list of things to include on your next rental agreement revision. You will discover issues from your experiences that should be included for subsequent tenants. Also, you may want to take photos of the pre-tenant conditions and furnishings, with or without a written inventory. Update those as the situation changes. If you plan on doing this on a regular basis, you might want to create an information sheet with a few photos (exterior of house, rental room, common rooms) and basic terms of rental, including rental rates. A MS Word format of this info can be sent by e-mail, and printed versions can be given out to referrals or other contacts. I’d recommend having hard copies of any pertinent documents (in addition to your electronic versions) because it’s so much easier to manage and it’s invaluable in the case of computer crash or theft.
If you’d like, I can send you a copy of the rental agreement I use for the furnished duplex I rent out as corporate housing. (Let me know by posting a comment here, and I’ll send it to you by e-mail from contact info on your blog site ) Avoid the “boilerplate template” lease model, and make your agreement specific to your situation. The agreement works best when it describes the details that are important to you and understood by all concerned parties. The idea is to have a mutually respectable agreement with terms that everyone understands and agrees to. It should not be some kind of legal “gotcha” form that presumes that the landlord is king and the tenant is a potential suspect with no rights or entitlements. You want buy-in, not grudging resentment.
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I would love copies of your rules and forms. This is my first time renting out rooms in my house. Any advise would be great. Thank you. Jeannie
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Denise,
I would love to have copies of your rental agreement and application forms. Sounds like you don’t suggest criminal or credit checks…is that right?
Thanks, Becky S
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Sorry if someone already mentioned this, but there were a lot of posts so I didn’t read through them all…
Penny you say you use wood heat during the winter, but how warm are the rooms in your house actually getting? I ask this because a potential roommate may want to use an electric space heater, and you should come up with specific guidelines in such a situation.
Case in point, I live with four other roommates, all of us graduate students. Over winter break, everyone went home for the month except for myself and one of the guys. I have a full time job (I’m just finishing my thesis), so my electricity use was the same as always, minus the time I went home for the holidays. My roommate has a school job, so he didn’t have to work over break. Consequently, he was home all the time, in his room that whole time, constantly running the electric heater. With three people gone, our electric bill for the month was almost $80 more than normal due to his irresponsible habits.
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I would rent out for a flat fee plus half (or 1/3) of utilities. I would try to find someone you already know, rather than someone you met online.
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1. Make sure you can even let a room out in your house. Many cities and neighborhoods have restrictive convenants that prohibit you from doing so, unless you apply for and receive multi-family housing zoning.
2. Get a written lease. Make sure you know what your rights & responsibilities are as a landlord. Last thing you want is to get sued in a year because the tenant feels wronged and they have the law on their side.
3. Understand the legality of your postings looking for roommates. Discrimination based on age can you get you in trouble. You may want an older renter, but that may get you in trouble legally. That’s why realtors aren’t allowed to advertise properties as “great for young families” or “perfect for an older couple.”
4. Protect yourself & your assets. Make sure you have adequate liability insurance. Get an appropriate security deposit from the renter. Do background & credit checks.
5. Make sure you understand the tax liabilities of being a landlord. Either talk to a CPA/tax advisor or get a really good book.
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(Angulo you are a weird who needs help)
In the uk a large part of room rentals income is not taxed up to £4000 a year. I’ve rented out a room for the last 8 years. I include bills so I’m not chasing people for electricity or gas once they leave. Ihave wifi for the house. I used to try and get the lodger to buy bog roll or washing up liquid but now don’t bother and just added another £10 onto the rental a month.
I advertise via http://www.gumtree.com which more people ue here than craiglist
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ps when interviwing potential roomies always listen to your intuition!
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@ Mr. Fisher- I would love to have a copy of the rental agreement.
I think that these ideas are great. I’ve gotten a lot of perspective from all the various contributions. It seems that the over-arching advice is to be sensible and take it slow.
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As someone who out-and-out “sublets” her apartment while on vacation, I’ve written a few how-to posts on the subject:
http://moneymatekate.wordpress.com/2009/01/04/4-ways-to-put-your-home-to-work/
http://moneymatekate.wordpress.com/2008/09/30/vacation-pay-for-the-self-employed/
Hopefully Alison will find some of the information useful.
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Penny,
I can’t find any contact info for you on your website (you might want to include it at some point). Here is my home phone number: 757-489-2996. Call me and I can talk to you about my landlord experiences in additional detail, and get your e-mail address. It looks as though your blog is fairly new. I just started my own blog a week ago: http://denise.fisher.wordpress.com (I’m still working out the kinks and getting set up), and it looks like we share similar topics and perspectives (my focus is on getting fit, getting organized, and getting one’s financial affairs in order – I think they’re overlapping objectives). Perhaps you can give me your perspective on your blogging experiences and the topics of your posts in exchange for the documents I can send you. (I have a couple other docs I can send you as well.) Call whenever you like. I’m in the Eastern Time zone.
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Being one myself, I agree that grad students/young professionals are generally a good type to rent to. Though I can’t speak for everyone, my friends and I who rented during grad school were there for one reason: school. We weren’t there to party or cause trouble or harass our landlords. We were friendly but we were BUSY, so we didn’t have a lot of time to lounge around in our landlord’s living room and getting in people’s way.
I personally wouldn’t want a landlord that I would have to be buddy-buddy with or share meals or anything “parental” like that. I’m not joining a family or expanding my social life, I’m just living there. As a renter I just want my own space and a nice, approachable landlord that I have a good “business” relationship with.
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Taking in boarders is the most sensible thing in the world, and given the present economics, I think it will become a more common thing to do. People that have not considered it before should read all these great suggestions and advice. Community placement offices are encouraging elders who want to keep their homes to rent to tenants – it’s a great idea for single parents, for example, to rent from an older person, since it provides everyone with more connection and support. (running errands and doing chores can be part of the agreement.) Another model is co-housing – where people really are setting up a cooperative intentional living-together situation with shared meals and lifestyle decisions, creating an alternative family.
It was interesting to read that some of these things happen by themselves among renters and leasers.
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I had a slightly different experience renting out extra space in my house that avoided all of the people problems mentioned in responses above.
I used a new website called http://www.homstie.com that let me rent out my extra space as storage instead of living quarters. I listed my 2 car garage on Homstie and had multiple people “apply” to rent my storage space. I selected the one who seemed most trustworthy and he is now paying me $200 a month to store his boxes, couch, treadmill, and rooftop ski rack in my garage. I bought a lease agreement from Homstie to legally bind our transaction and we set up a monthly recurring payment on PayPal. I can’t think of an easier way to make $2,400 per year.
To top it off, apparently my renter is saving big time. He used to pay over $700 per month for a similarly sized unit at Public Storage!
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Now I have read most of these comments and have been enjoying seeing the different viewpoints from the landlord and renters. I haven’t been a landlord as I am still renting. I have lived in college residence, lived with family, other familys that I didn’t know, my friends, and complete strangers.
Now I know everyones saying write down every little rule but that makes you seem very unflexible and personally it would scare me off quickly because it makes a person come across as not very easygoing. I had a bad expierence living with a family. The house was very large and I had my own room and shared a fridge with another person renting there. This was fine but the family took up half of our food space with thier things and kept telling us they were going to clean it out. There were no animals when I moved in, but after about a month of living there the family got a puppy. They didn’t tell me they were going to do this and I probably would have been fine with it(I don’t mind animals) but when they would leave for a day and I would be home with the dog barking all day it strted to get on my nerves. I usually get home from work around 7 and I will take a shower some where from 8-10pm. The landlord told me I couldn’t take showers after 8 because it was to noisy. Eventually what made me move out was the landlord would look in my room when I wasn’t home(no locks on the doors). I wouldn’t move into a place without a lock on the door. I am fine with them checking every once in awhile but they have to give notice. But the biggest problem was I just couldn’t stand the father/landlord he was very opiniated and felt the need to share his opinions with me, hit the new puppy yelled at his children/wife all the time.
Now I am sure you could make it work for you but just thought I would give the renters point of view. Most of all communication is important and if you make rules, I think its good to explain them. Earlier someone mentioned they wouldn’t allow renters to change the thermostat. I hope that if someone wanted a temperature change they wouldn’t just say no its my house I control the temperature. The person is paying money to be there. Shouldn’t they be able to live close to the way they want to. Instead of just you.
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I’ve only been a subletter and am currently a roommate where we’re both on the lease. My best advice is to pick someone whose lifestyle is very similar to yours and values the same things you do.
For example, my roommate and I are both messy. Before we agreed to room together we clarified exactly what sort of mess we were willing to tolerate (no rotting food or bad smells, some dust is okay, some clutter in the common area is okay).
I would describe how you live in as much detail as possible in your ad. When I was looking to be a subletter I knew what ads not to respond to, just because I knew the lister’s lifestyle and mine would not mesh.
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I bought my first home last year and rent 2 rooms to friends. Since they were previous relationships, we very deliberately went for coffee twice to talk about how the living arrangements would work for the 3 of us. Almost a year later, I would say it has gone really well, with one big regret…
I really regret charging flat monthly rent with no portion of utilities. Aside from their environmental consciences, they have no incentive to conserve. Two quick examples – their significant others do their laundry at my house when I am not home. I recently found this out. Second, the doors get left open for unreasonable amounts of time. And in Minnesota in January – I can practically see the dollar bills flying out the door.
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Zafer – you start out saying you don’t want a place with a lot of rules, then list four common points of contention between people living together (use of common spaces, animals, noise and access). Seems the kind of thing you’d like to have covered in writing.
It can be awkward and tedious to read through and understand things, sure, but it’s better to get things sorted out before than after.
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Utilities: I am into simplicity and liked including utilities. However I kept records of the year before she moved in and the year after she moved in to show her the impact of her residence on the bills. We weren’t comfortable splitting it evenly because we were a family and she was one person. Part of keeping that cost down was not allowing her thermostat priviledges. The thermostat was set and she wasn’t allowed to adjust it without consulting us.
Guests: For personal safety she wasn’t allowed to have guests when we weren’t there and no overnight guests. Since this was a friendly situation that wasn’t a big deal. For a stranger I would make VERY clear that you are responsible for anything done by a guest. I have known people to have things stolen or broken and not replaced by guests of renters.
There are leases and then there are roommate agreements. The lease is the rent/utilities, etc. The roommate agreement are how you get along. I would suggest revisiting the roommate agreement a month after move in and then quarterly. You can start it really sparsely with the things mentioned here and then adjust. By scheduling the meeting you avoid doing it when there is a specific problem and your emotions are high. There are going to be things you don’t think of. One of ours was the length of showers. Our housemate would take 45-60 minute showers. That was unacceptable and there wouldn’t be ANY hot water left. Who thinks of that before someone actually does it?
Another point: Will you shop for them? That was a service I offered. I shop on a schedule and if a list was available I would shop for her. It wasn’t a big deal for me, it made it easier for her (so you could charge for it), and it gave me a lot more power over food and storage. This could get sticky so it is the sort of thing to keep in mind and offer to someone you are already getting along with, but if you include any food in the rental agreement you should have a plan for shopping.
Finally remember THIS IS A BUSINESS ARRANGEMENT. It can be hard getting in a landlord mindset. You want to be nice. You are understanding and sympathetic. But THIS IS A BUSINESS ARRANGEMENT, not a charity, not a friendship. You can be friends, but don’t let it get in the way. This is your home and your property and remember that.
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From my experience, the most important thing is how you each treat the common areas. Make sure you set the rules from the start (i.e. dishes, food, level of cleanliness). If these things are established, less problems will arise.
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I didn’t read all the comments, so hopefully this isn’t duplicative.
I’ve rented rooms plenty, and have been in the position of needing a roommate and not needing a roommate, but wanted the extra income.
You are in a much better position to find a good roommate if you don’t necessarily need one, but just want some extra income. That’s a strong position to be in when it comes down to weeding out roommates.
Also- dishes are the #1 problem that creates problems with roommates- steer clear of that and things will be fine. . .
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After being off of work for 7 weeks, I have a lot of RSS feeds to catch up on so forgive me for not reading the entire thread.
I rent out both of my spare bedrooms and have been doing it for a few years. It has its headaches but the extra money is very, very nice.
- Rent it out with all utilities included on a weekly or monthly basis. It’s way easier that way.
- Have rent due on the 1st of the month and if they move in on a day other than the 1st, have them pay a partial month first. Once again, it is easier this way.
- Usually my roommates will pay for their own food and cook it themselves.
- Be patient when finding roommates. When you find a potential roommate, sleep on it a night and let them know your final decision the next day.
- Trust your gut. Every roommate that I’ve had that I’ve had an iffy first impression hasn’t worked out. All but one of the good first impressions worked out. This is your home so be picky about who lives in it.
- Be fair and honest with people. I’ve discovered some iffy things about people so expect surprises because not everyone is completely honest.
- When advertising, use a bulleted list like this. It is easier to read than paragraphs. Also, use shorter sentences than I’m using now.
- There is a high chance that you will get some “interesting” stories from having roommates. I know I have.
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Oh, a few more things:
- I set the expectations early about the cleanliness level of the common areas and the chores that need to be done.
- For me, no food in the living room, no shoes on the carpet, and keep the common areas clean. Don’t care about your room or bathroom unless the bathroom gets nasty.
- Set expectations for overnight “guests”.
- Craigslist is the easiest place to get roommates but this also leads to some good stories.
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It really depends on if you want a roommate or a lodger. I know a lady who rents her (finished, daylight-ish) basement to someone, and they don’t really interact. I live with roommates, one of whom owns the house, and it generally goes pretty well.
Also know, some people don’t want to live with a couple in a group situation, especially if it is just the renter and the couple. I have, and it was an awful experience and it lasted only three or four months before I moved. (as the third person, whenever there was a disagreement I was never the one with someone on my side — it got weary and stupid when I started being accused of things that didn’t happen and the boyfriend was too whipped to back me up when he knew the truth of the matter).
Alternately, you could look for short-term renters. I’ve known people who specified a room would only be available for six months. There are plenty of students and travelling nurses out there who are willing and wanting to do this.
If you’re more interested in the income than the roommate, then I would really re-think doing this.
Also, figure out what type of roommate you want. If you don’t know where to start, start by reading housing offered/wanted ads on craigslist. If there aren’t many in your location, look at those of bigger cities. *Really* know what you want from a lodger and what you can and cannot stand. Personally, I won’t live with anyone who smokes pot, though I can stand having a mildly untidy kitchen and bathroom.
In regards to utilities, you can just split everything three ways, or you can do what my landlord does: charge $50/month. At the end of last year, the amount of utilities paid was less than the actual utility cost, and I got a discount for my share not used. It was a nice bonus at the beginning of December.
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My wife and I have rented out our attic to Japanese students who come to the US to study English for a short time. We are working with an agency that arranges for the visits. It has been a wonderful experience – all we do is provide the room, breakfast & dinner.
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I rented a spare room from a woman once and it worked out very well. To put myself in her or any other person’s shoe who does so, it seems all about the person or people you actually wind up renting to. Renting a room usually means there is some other focused activity area in the renter’s life. In my case I was going to college and I understood college (and working to support that), were my goals. I kept my footprint in the house as small as possible while there, making very conservative use of the kitchen and other areas. In fact, it was very odd for me to ever be out of the room save for coming and going.
For someone who wasn’t as focused, who, in essence, attempts to “rent the house” by “renting the room”, I could see where problems might crop up. In my case, I could ignore not being able to play loud music because I knew where I was was basically temporary and didn’t demand equal rights as a way to make life easier for the widow, and, prolong my cushy situation. Someone just living life and asserting rights to do as they please in their “space”, on the other hand, could wind up very badly for the renter.
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Well, the subject is
“how to rent out your spare room”
1st thing you really need to decide is if you want a roommate, or a tenant/boarder–
There IS definately a difference.
Make sure you state which you are looking for in your ad, AND put it in writing in your lease.
In most places, even the laws are different regarding a roomate vs a tenant/boarder. Usually tenant/boarder situations within your home have less legal standing in court. It is easier to evict as well. Their space is confined to their room, and bathroom and is usually written up as such. Basically think more of a hotel guest, it is viewed as a temporary housing, even though they may stay as long as you let them.
A roommate shares much more of the house–more common areas. Laws look at this differently-they have more rights than just a boarder/tenant-even though you own the home. You usually must give this tenant specific mandated notice of eviction, because they can establish residency. They are covered by very specific laws, as you are as well.
This is to protect both parties.
A tenant/boarder mostly just sleeps and bathes there, they stick to their “Room” unless you have a food or kitchen priveledge agrmt.
In my experience of 15 yrs as a landlord, I have rented to roommates, boarders, and seperate apartments–I say–know what you can live with ahead of time.
If you are looking to just rent a furnished room with bathroom priveledges–most of the available prospects are single men, few women in my experience. These are usually the easiest tenants/boarders, they sleep, wake, shower, go to work, go out and eat, come home only to do the essentials…**Usually very low maintenance**. This is great for people who work too far from home and get a flat rate “per diem”–business men who work in different cities a few to several months in a row. Many prefer to rent a room as opposed to a hotel, it’s more economical.
But the possibilities are endless.
There are many foreign exchange student possibilities as well. Both for highschool and college level students. Some are for more independent students, some are more like “host families” where you include them in certain meals and designated activities.
I have had wonderful experiences, and horror stories.
If you are looking to do this to make a few extra dollars, because you are needing the $$–you MUST look at this as a business endeavor, not a personal one.
If you are not “needing” the $$ but would like an easy way to save additional $$, perhaps you would like to be more flexible.
2 areas aside from on time rent pymts were an issue and MUST be agreed upon ahead in writing–kitchen use/cleaning expectations, & bathroom use/cleaning expectations.
Designate 2 different days for laundry use if you include this in your agrmt.
And ALWAYS have included in the lease a provosion for guests, over night or any other kind. Most residential leases have this provision-even hotels have requirements-so why should renting a room in your home be any different?
If you do not want over night guests, make it known and agreed upon in your ad and in the lease in writing.
If you have children in the home, you don’t want to explain to them who the strange woman/man is in your kitchen every few days…
You can put almost anything you want in your lease when it is a part of your actual home that you are renting.
A suggestion is to actually view the roommate/shared housing ads on craigslist–view them for your area and any other area–see what people are asking for rent and what ammenities they include–see what types of things they ask up front–You’d be totally suprized on the arrangements people make when it’s their home, and there is always someone who will follow and appreciate your rules/guidelines/lifestyle, and those who will pass your ad by thinking it’s not for them. Go take a look!
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The Seattle Times had a feature on this today. If anybody is interested, here is the link:
“In tough times, the rented room is resurgent”
http://seattletimes.nwsource.com/html/pacificnw/2008817655_pacificproomies15.html
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I’ve had tenants and roomies, often people I know. I think if I was going to do it again I’d do the following:
1. Have the candidates come to your house to meet you and review the space. Once you accept someone, though, go to THEIR house to see how they live now. I had a friend who lived in cluttered spaces she swore she’d clean up when she lived here – not so. A roomie needs to be compatible. I’d also recommend starting the tenancy with an understanding that the first 3 months is probationary to see if they fit. If they don’t, they have to leave in a month and you’ll rebate them 2 weeks rent to manage moving costs.
2. Don’t just make it a sweet deal so you can get your pick of roomies. Make a deal you’ll be happy with. That way, even if they aren’t as wonderful as you’d hoped, you’re still getting financial benefits and don’t end up resenting the situation.
3. Be clear. Very, very clear. Who pays for broken things? Who shovels the snow and leaves? Who cleans the common areas? Who does the garbage? A million fights later on will be avoided with clarity now.
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As a result of the credit crunch, in January 2009, I launched http://www.hostatourist.com. It is the first social networking website of its kind that allows homeowners to earn extra cash by renting out a spare room, couch or airbed to tourists and visitors.
For tourists and visitors it is far cheaper than staying in a hotel.
It is also handy when hotels are in short supply during major sporting events like Olympics 2012.
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If I rented a room again, I would also outline the rules with my partner as well. We were new to having a boarder and didn’t set out our own expectations, other than if it didn’t work, we would give the tenant 2 wks notice. We provide the room, electric, internet, cable, etc. For the most part our tenant has been good. I think too good. My partner spends too much time alone with the boarder and now seems to priority our schedules around the tenant. The tenant has been privy to our most private family problems. In turn, they are now confortable talking about private family issues and I feel violated. Our regular normal schedules have been turned around. When I expressed my desire to give our tenant notice, my partner looked like they had been hit by a bus and now we are arguing, the tenant is here and my privacy and trust is shattered. I feel like I might be looking for a room anytime now!
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RE: Denise Fisher Says:
January 31st, 2009 at 7:32 am
Hello Denise: I am Patricia and would love a copy of your rental agreement please! I am preparing to rent out my 2nd bedroom and have never done it before and can use all the help I can get! Your article is most helpful, thank you! Blessings, Patricia onewithjoy@gmail.com
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Hi Denise. . . we are working to downsize, 3,000 sq. ft. on two levels. We will rent 3 bedrooms in the main 2,000 sq. ft. of our home. If you have a rental agreement that you could send, it would be so appreciated. This is our first attempt at being landlords in our own home, but we are just 2 now and lots of space to do a house share. We, the owners, will be occupying the lower/main level of the home and once in a while use of kitchen and laundry room, which is shared commong area. I look forward to hearing from you and thank you in advance for any thing you can send that will help from an application perspective! Peace and blessings!, Carolyn A.
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