Maybe money is a little tight these days and you are looking for some extra cash flow. The idea of renting out a spare bedroom or loft in your home has struck you a great way to make some “easy money"—just the thing to make your life a lot simpler. But before you post that “room to lease” sign, there are some things you definitely should keep in mind.
Is It Allowed?
Don’t assume that because it’s your home, you can do whatever you want. Some city ordinances restrict certain subdivisions or areas from having rental properties. If you live in a restricted area, you may not be able to rent out any space in your home.
Even if it is permissible, you have to find out about any specific restrictions. For example, if you live in a homeowner’s association, you may need the board’s permission to rent out a portion of your home.
If you don’t own your home and only rent, you will need to have the landlord’s permission. There are several downsides for a landlord who allows you to rent out a portion of your unit. You’ll have to provide some convincing arguments for your case if your landlord isn’t on board with your plan.
Decide What You’ll Rent
Once you know you have permission to rent out a space, you’ll have to decide what you’re renting. Is it just a room with a shared bathroom and kitchen, or is there a separate apartment in your home? Will the person use your laundry facilities or garage?
You may even want to reconfigure your space to bring in more money. For instance, you may give up your massive master bedroom and take a smaller bedroom to capitalize on the rent for a master suite.
You’ll have to compare pricing with other rooms for rent in your city or neighborhood. If you don’t price competitively, you’ll end up with an empty space.
Don’t forget to compare amenities and distance to businesses or schools when choosing your price. A room within walking distance of the local university is going to bring a higher price than one that requires you to drive even one or two miles.
Before you place an ad or meet with a prospect, have a set of rules in mind. You need to have established boundaries, so the tenant isn’t bothering you at all times of the day and night, and coming into your private space. This issue becomes even more important if you’ll be sharing a common area.
While you can’t discriminate when choosing one person over another, you can set requirements that all applicants must meet. For example, you may not want to rent out a room to more than one person, which means you wouldn’t accept couples or roommates, and you should state that clearly from the beginning.
Be thorough when checking the references of anyone you are considering. Make sure that he or she has a job and can afford the rent. Call the references and find out as much information as you can. It’s also a good idea to do a background check, especially if the person will have access to the rest of your home.
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