Have a house and want to rent out a room?
The vast majority of people who stumbled across my blog are in this bucket. You have a house and want to rent out a room to make some extra cash. Here are some things to consider:
- Which room to rent out?
- How much to set rent price?
- Understanding Rent Price and Rental Income
- Is Doing a Renovation for Rental Income Worth the Initial Investment?
- Why I Hate Cash or Checks as Rent Payment
WHICH ROOM TO RENT OUT?
If you only have one spare bedroom, the choice is already made for you. However, if you have more than one bedroom, you want to consider, which room will offer the most privacy between yourself and your roommate, which room will be an easier sell to prospective roommates. When I say easier sell, is the size of the room adequate, are there spacious closets, does the house or room have A/C. What other amenities does your house offer to make the room more attractive.
HOW TO SET THE RENT PRICE?
There’s a right way and wrong way to set rent price. One could say, my mortgage payment is $1500 per month, so I want to cut my mortgage expense in half and so I want to set my rent price at $750 per month. Well, this is the wrong way to set rent price.
The right way is to research comparable rental properties and determine what the market rate is for a studio apartment and price the monthly rent of your room accordingly. I wrote a post detailing it here.
UNDERSTAND THE DIFFERENCE BETWEEN RENT PRICE AND RENTAL INCOME
There’s a difference between the two. You want to maximize your rental income even it means lowering your rent price. To learn more, click here.
IS DOING A RENOVATION FOR ENTAL INCOME WORTH THE INTIAL INVESTMENT?
I initially rented out a spare room that was empty to my very first roommate in 2006. The experience went pretty well that I took on a renovation project to redo my basement. The idea was for me to move into the basement and rent out the current move I was living in at that time.
One thing I would recommend is if you already have a room to rent out versus making a renovation to rent out a room, I would start renting out the room as it is and make a little money first before investing in a renovation project. I made the investment because I’ve already tested finding a roommate and made a reasonable judgement that a second roommate would be attainable.