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?
This article is about Ask the Readers, Entrepreneurship, House and Home
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Renting a room in someone’s house was a good experiment, but probably not something I’d try again. It actually worked pretty well for a while, but the renter/roommate line became sort of an awkward blur when it came to anything personal. In the end everyone’s different; in my opinion though, it’s easiest in the long term to room with someone you can share more ground with.
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I have been renting out rooms in my home for over a year now and I mostly love it! Many of my roommates have rarely been around. One of my current roommates sleeps there maybe once a week!
I ask a high price for my rooms because that seems to bring in a “high quality” tenant. It seems the lower the price, the sketchier the responses you get. I’ve been a landlord for 9 years, so when go through choosing a roommate, I have years of experience to fall back on. I like to be very clear on everything up front. I charge $500/ furnished bedroom (this is in a low cost-of-living area in the deep south – I think it’s an outrageous amount, but people keep renting!) and that includes utilities.
Recently one of my closest friends has moved in and that has been the biggest strain so far…she brought her 2 bedroom apartment worth of furniture and a ton of food and kitchen crap. All of my other tenants were single men who didn’t cook and had no furniture. They are definitely the way to go!
One last note – examine why you are renting out a room. Do you have a specific financial goal in mind? What are you going to do with that extra income? It can be very easy to get in the mode of living off your new expanded income. I set a goal of paying off my new car (a surprise purchase after hitting a deer with my old car). I am happy to say that I will be paying it off this Friday! Having a concrete goal like that is great when having a roommate gets cumbersome – I just remind myself that this person is paying for my car and to be patient with them. My roommates will be paying for a new roof on my house in the next four months! Hooray for roommates!
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