Just this past week, I stumbled across a post from nerdwallet giving information on how to rent out a room. The article details 6 basic steps and I want to offer my insight against the advice because it was most likely not written by someone with first-hand experience renting out rooms.
The first sub heading is “set a competitive rent.” I couldn’t agree more with the heading. Some key tips are to find comparable rooms so that you can gauge what the market demands. The wrong way to set rent price is by determining what you’re expenses are and the amount you’d like to cut expenses by earning that in rental income. The article suggests to use padmapper, which I don’t use because the site tends to have more sublets and full on leases rather rooms despite the fact that padmapper is sourcing it’s information from craigslist.
The “List Your Room” section suggests listing on airbnb and craigslist. Like the article, I agree that airbnb is geared towards vacation renters and if you’re looking for something long term, airbnb is not the right approach. I also think it doesn’t hurt to list your room on roommates.com because it’s free unless you want message potential roommate or read messages from them. Both craigslist and sites like roommates.com are susceptible to scammers so be very careful.
The next headline, “screen tenants” is an important step to land reliable roommates. The article does hit it right on with verifying employment and references. There’s a lot of different approaches to background screening. You can do a paid background search or simply asking the right questions could turn up more relevant detail that will dismiss the potential roommate without ever needing a background check.
Choose someone you’re comfortable with is something that is easier said than done. If you’re an absolute first time “live-in landlord,” you’re going to be uncomfortable with anyone moving into your own house. The feeling does go away after you get to know each other and get comfortable with them being around. I think the article is flawed in that there’s no way to determine if a roommate is going to blast music at 3am in the morning just by meet and greet showing. Based on my experience, most roommates are not inconsiderate on purpose.
Collecting a security deposit is an obvious step in the process. The basic premise of the deposit is to incentivize the roommate to take care of the property. Any damage caused by the roommate outside of normal wear and tear is to be deducted from the security deposit. I agree with the statement: The standard amount to deposit is one-month’s rent.
The last heading: “Stay within the law” is something that needs to be considered to rent a room. I can’t tell you the numbers of times of I’ve received e-mails that asked about my thoughts of converting a garage or a large closet to a bedroom to rent out. Both instances are a “no go” because the former lacks any heat while the latter lacks a secondary means to egress. Additionally, most building code requires a bedroom to have a closet to be called a bedroom. This doesn’t prevent people from renting out that particular room. Some folks have e-mailed me about converting a living room with a make shift door to a bedroom, which is legitimate from the aspect of fire safety.
Overall one-page articles don’t go into the nitty gritty detail of renting out a room. I think the main message of the article is to give enough information so that folks contemplating making more money can understand the work involved and whether it’s something to pursue. If it is, folks will either give it the good ole’ college try or do a bit more research(and hopefully end up at my site).