How about Renting Out a Room in Your Home: Problems and Concerns
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| Articles - Real Estate |
If your home has an extra room you're not using, perhaps you're considering renting it out for additional income. Allowing someone to board in an extra room has been a common practice in days gone by; however, it can be a scary thought in this day and age. That's why you should think it through carefully and understand all the potential problems before putting up a rental sign or placing an ad in your local newspaper. Here are some things to consider.
Privacy Issues and House Rules
You should be concerned about privacy issues for your family as well as the tenant. The room should have an access door to the outside so your tenant can come and go as he pleases. Will you rent the room to a male or female, or even to a couple? You'll need to establish strict guidelines about what can go on in the room. For instance, you might strictly prohibit drinking alcohol, pets, loud music, and parties. You might prohibit sleepovers (especially with the opposite sex if the tenant is single).
If you have children, you must take into consideration their well being and be extremely cautious about to whom you rent the room. This person will likely share other rooms with your family at times...the kitchen, laundry and bathroom in particular. Perhaps you will have an agreement about sharing the kitchen as well as doing kitchen chores. Also, consider adding a mini-refrigerator to the rental room for the boarder to store their own drinks and food items. This will save you from much confusion later!
Rental Agreement
Whether renting to a friend or complete stranger, draw up a professional style rental agreement with everything in writing. Include rental rates, all rules of the house, when rent is due and what happens if a payment is late, what you expect of your tenant in terms of chores, and whatever else you can think of. Having it all in writing will eliminate confusion, and you'll have ground to stand on if the tenant tries to push beyond what you've agreed to previously. Get the tenant's signature and have it notarized.
Selecting a Tenant
Just as a potential renter will try to find a place to live, you can take steps to find the right kind of tenant. Draw up an application for each potential renter to fill out. Require a rental deposit (in case there is damage when they move out). You should definitely do a criminal background check as well as pull their credit report to be sure the person seems trustworthy. Ask for three to five character references as well as an employer reference. Be thorough when interviewing tenants to make sure they understand the rules clearly.
Be careful about renting to close friends or family members. If someone knows you really well, they are less likely to take you seriously if you need to deal with an issue. It might be more difficult to landlord over someone you know personally. Also, if letting a room to a college student, be very clear about parties and friends coming over. Limit the number of guests that can visit at once, and establish a curfew.
If you don't have a room to rent out and need extra cash, perhaps you can transform a basement, garage or attic area into a living space. Please keep these ideas and concerns in mind before rushing into a room rental agreement.
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