You have a spare room in your house to rent but no idea how to begin. Renting out a room in your home can be a complicated process with lots of factors to take into account. Here are a few things you should consider before you hit the share button that “roommate wanted” ad.
Renting Out a Room: The Logistics
Understand the Risks
One of the common risks of renting out a room in your home is that the new tenant may access private areas of your home, with or without criminal intent. As a preventative measure, make sure to keep your valuables under lock and key, and set clear boundaries with your new roommate if there are any rooms they may not enter. You must also be aware of legal risks related to situations, from evicting a renter to ensuring your homeowner’s insurance covers the renter and their activity.
Acquire the Proper Forms
A formal rental agreement or lease is worth its weight in gold. There are many online resources available to help you create a rental agreement, though we suggest working through the legal scenarios with a qualified attorney. While sorting out the rental agreement, make sure to establish a thorough background check process.
Confirm That You Can Rent a Room in Your House
Suppose your home is part of a homeowners association, or your municipality has specific residential zoning ordinances. In that case, you must determine whether you can rent a room in your house without violating any rules or laws. A simple call to the appropriate local executive will answer the question.
Renting Out a Room: The Finances
Prepare the Space
Renting out a room in your house means that you’ll be living alongside your renter. Because the room is located inside your home — and not detached from the rest of the house like a former in-law suite or converted detached garage — there may be changes you want to make throughout your home.
For starters, think about putting locks on the doors to spaces you don’t wish renters to access, such as closets or other storage areas. You may want to invest in heavy-duty appliances that can withstand double the usage. In your personal space, consider purchasing a safe for your valuables. Finally, you may also need to furnish common areas for your renter.
Determine What You Will Charge
Will this be an annual contract? A month-to-month room rental? The rental length with which you’re most comfortable will help determine what to charge for the room. You’ll also want to look at online resources such as ApartmentSearch.com and Craigslist for insight into your competition. Factors influencing your rent price: parking access, internet connectivity, use of laundry facilities, etc.
Know Your Tax Responsibilities
Death and taxes, right? You can’t escape either one, and renting out a room in your house means you’ll have to address the tax man when the time comes. That means understanding your marginal tax rate, state and local income tax, and more. Fortunately, you’ll set your rent price at a level that helps you cover the taxes and make a profit. You can also record any expenses related to the rental space for some tax relief. Such costs may include repairs, maintenance, and advertising.
A Fully Furnished Listing Can Help
Are you ready to rent out the spare room in your home? If so, offering a fully furnished space might make your listing more appealing (and valuable)!
Rather than shopping at a big box store where you’ll wait weeks for furniture to arrive, browse CORT Furniture Outlet online and find ready-to-pick up furniture sets at a discounted rate. Furnish your space and get committed tenants quickly!