Renting out your spare bedroom can be an amazing source of extra income. But definitely be ready for the ups and downs that come with it. I’ve been renting out my spare rooms for 2 years now and have had at least 5 or 6 different people living with us over the course of that time, but no more than 1 person per room.
- Prep the room. I mean seriously clean it to the level that even the CDC would approve. Depending on who you’re going to host, you may want to acquire some furniture. There are quite a few people that come from abroad or out of state with nothing more than the clothes on their backs and a wad of cash in their pockets. Note the condition of everything that is yours in the room, including the room itself, and the amenities. I spent 5 years in South Korea working, and the one idea that I’ve brought back that I can’t live without now is a combination front door lock. Seriously, how has this not caught on in the states yet? You can set multiple codes and the best part is that you never need keys to your house! Program a code for each roommate you’re going to have and write them down somewhere. When a roommate leaves for good, just change the code in that particular slot.
To Contract or Not to Contract
- I personally went with the no standard contract option, because the people we host are students or young professionals back from college. They are transient in nature, but mostly end up sticking around for close to a year minimum. Maybe you would prefer a commitment and want that hard pen-to-paper action for a year. I ended up going with a happy medium called “the deposit agreement.” It’s a simple document drawn up with my own version of legalese. I’m not a lawyer, but I have common sense on what needs to be covered. If you want more assurance, have a guarantor sign as well. When I’m doing a showing for potential roommates, I let them know that the deposit agreement protects both them and me. This makes sure you get your money back as long as you don’t break my shit. That usually garners a chuckle or two, although I am actually being quite serious in that moment. And people in general tend to take situations more seriously when they sign something. Acquiring a deposit not only protects the room, but it can also double as last month’s rent. Just be sure to put the requirement of thirty days notice in the agreement. That will give you time to inspect the room, ensure that you will have the deposit on hand, and give you time to find a replacement in their final month with you.
- I’ve tried almost every room rental website (and paid for them) under the sun. Almost all of them are awful. If they make you pay for communication with potential renters, don’t bother. Surprisingly, the old faithful, craigslist.com, has proven time and again to work. It’s free, open, and honest. I know most people still have their reservations about the site, because some get hurt by shady dealings with listings on the site, but be open and honest about your listing and protect yourself. So take some great photos of the room and get down to producing the best advertisement of your life. Be straight forward about what you’re looking for in a tenant / roommate and what you offer. You don’t want to go advertising garage parking when it’s sacred to you. Don’t use your real / exact address in the listing. Don’t use your primary email when creating the listing. Create a separate email to track and respond accordingly. Setting a price for the room should be based on your market and target market. Shop around and think like a renter would. Put yourself in their shoes. Are you going to include utilities with the rent or split it out monthly? Consider going with a flat rate and combining it with the rent to save yourself the hassle of trying to split and collect the utilities every month.
- Ok, the emails are flooding in. Now what? Filter. Don’t respond to every email. Be selective. If you’re not cool with a recently divorced 43 year old renting out your space, don’t reply. I know this may seem rude, but it’s not your problem. Be weary about giving out your phone number so quickly. Usually, potential renters will give you their number first. In this day and age email is akin to text messaging. They both can get to your phone just as well. Schedule, schedule, schedule. Setup times to have them view the room (a showing) individually. Plus, wouldn’t it be nice to know who you’re going to be living with? Give them a deadline on when you’ll be making a final decision. Keep the upper-hand. It’s always a negotiation. Don’t accept deposits ahead of time to reserve the room. Doing so will prevent you from finding other potential renters. And don’t remove the advertisement until you have the first month’s rent and deposit in your hand. Create a set of house rules. Don’t go crazy with the rules. Start with your top three pet peeves and go from there. For me it was rent, guests, and cleanliness.
- Now the flip-side. It’s been a week and nobody has emailed you about the room available. What do you do? Rework the advertisement. You could be a great roommate / landlord, but your listing is unappealing.
Now you should have most of the basics of renting out your spare room. Good luck side hustlers.