I have rented out rooms in my house for over five years now.

Since I began over five years ago I have taken in over $80,000 in rental income and tenants have paid me 100% of the time. I have also saved over $100,000 at 27 years old. 

In this post, I am going to show you 10 tips for renting out a room in your house.

Tip 1: Confirm You Are Ready for a Roommate

Taking in a roommate is something you need to carefully consider. A few questions to ask yourself are:

1. Am I willing to give up some personal space?

Having a roommate means you won’t be able to walk around in your underwear all day (#workfromhomelife?). 

Joking aside, renting a room in your house means you will have to make some alterations to your life. I’ve made several changes in my life. Cooking at a different time, washing my dishes immediately after use, and not playing loud music are a few I have made. 

To me, these are small sacrifices made to have the financial benefit of the monthly rent.

2. Does my lifestyle allow for a roommate?

• Do you jam out on your guitar at midnight? 
• Do you have a rocking surround sound system for your TV? 
• Do you despise being around others, especially people you don’t know well?

If you answered yes to any of these questions you may want to pass on renting a room.

I’ve seen time and time again new landlords who think they can rent a room and keep their same living habits with a roommate. This simply is not the case. Once you convert your home into a renting space, changes have to be made.

To be successful in renting out a room, you’ll have to make sacrifices. 

If you believe yourself to be a relatively quiet person, easy to get along with, and are good at communicating, renting rooms may be an option for you.

Tip 2: Make Sure Your House is Roommate Ready

There are several things you want to make sure are in place before renting a room. You’ll want to read up on your state’s landlord-tenant laws and the fair housing act to understand what is acceptable and what is not. There also may be local zoning ordinances that you want to make sure you are aware of.

Here are a few things that you should do when you rent a room regardless of the state you reside in.

• Smoke and carbon monoxide detectors in their correct place.
• Have a keyed lock on your master bedroom and their bedroom door to respect your tenant’s privacy.
• The bedroom is freshly painted and any holes filled in.
• Living space in the entire home free from clutter and personal items.

Once you have the house ready you can consider renting a room. I strongly recommend you do not rent a room until you and the house are 100% ready to take someone in. 

I have made the mistake of having someone move in too quickly because I was desperate to rent a room because I thought I “needed” the money.

Bad idea, big mistake. Don’t do that. 

Tip 3: Write a Clear & Specific Room Advertisement

After a few bad roommate situations, I was stuck and didn’t understand why it kept happening to me. 

After some reflection, I realized that the problem was not my roommates, it was me. 

This sobering fact made me realize the only way I was going to find my ideal roommate was by being specific and clear on what I wanted and what I did not want. 

My original advertisement was vague, only had my email address, and did not talk about the important aspects of the house, living situation, or my expectations.

There are 8 elements I added to the room ad that helped me find dozens of ideal roommates. The best one was with me for over 3 years, was quiet and paid rent like clockwork. These elements will help you charge higher rent and find exactly what you are looking for.

1. Date available

Something so obvious that most miss. Put the exact date you are ready for them to move in. Don’t put “in a couple of weeks.” Instead, write “ready for move-in on December 1st.” 

2. Proximity to local attractions

Is your house close to the university, grocery store, lake, or highway? Make sure to include any of these and the drive time. I even hopped in my car and timed how long it took to drive to the local college. 

This is good to put there because it saves your future roommate time and if you are too far away from their desired location it will save you a phone call. 

Be creative too. I list how close the bike trails and lake are to my house. Figure out why people would want to rent a room in your home’s location and list those nearby attractions. 

3. Room description

List the square footage of the room and the dimensions. This is common in the real estate world. It helps the roommate see if renting out a room in your house can fit all their belongings. 

List what else the room has. 

A private bathroom, ceiling fan, dual pane window, walk-in closet, and hardwood flooring are all examples. Again, better to be as specific as possible. 

4. Amenities

List exactly what they will have access to while renting from you. Washer and dryer, fridge space, high-speed internet, cooking access, covered parking, and others. Make sure they are clear that they are renting a single room and not the entire house or master bedroom. I also add the square footage of the house so they have an idea of how much space the entire property is.

5. Lease terms

I do my best to avoid short-term rentals when looking at potential tenants. The reason is that I spend a lot of time making sure the room is ready and screening tenants takes a lot of time also. If you are going to do a month-to-month or 6-month lease make sure they understand that will be part of the room rental agreement. I prefer the room rental to be month-to-month. We’ll touch more on that later. 

6. In search of

This is where you begin to be very, very specific on who you want to rent out a room in your house. 

Here are a few traits that I list in the ad: clean and tidy, responsible, peaceful, and open to communication.

You want to find a roommate who is serious about life. I’ve dealt with many people who think life is a joke. I have found that people who are working full time and are more serious about life are going to keep the spare room in good shape and pay rent on time. I love it when the rental income hits my account on the first of every month! This makes renting out a room all worthwhile when that transfer comes in.

7. Not looking for

Again, be very specific. If you are vague your roommate will not respect you or your house rules. 

I talk about how I go to bed at 9 pm and party animals are not conducive to this environment. Party guys usually don’t pay rent on time either. Lose-lose. If you have some specific interests like personal finance or the guitar or a certain TV show, make sure to list that too. You may find a kindred spirit. Whenever I’ve found someone who has similar interests as me, things have gone smoothly.

8. About the roommates

A brief introduction to me. I talk about my job and how I am the best landlord you’ll ever have. Humor here is good too. Real estate can be dry sometimes. Simply because you have your own house and are a landlord doesn’t mean you have to be stuck up. 

9. Phone number and call to action

Don’t list your email address. You’ll have foreign “royalty” who will offer to send you $400,000 via wire transfer, all they need is your bank account number and the address of your real estate. These scams are prevalent on every real estate website. 

Put your name and phone number and say “if you have not read this whole ad don’t call. Serious inquiries only.” That line alone has saved me countless hours of talking to unqualified people. 

Tip 4: Choose the Right Person By Asking the Right Questions

Ask dumb questions, get dumb answers. 

Elevating your questions will help you fend off potential tenants who are not your ideal roommates. 

You want all the questions to give you insight into if this potential tenant is going to be a good fit renting a room in your house. 

Here are the three most important questions you want to ask anyone interested in renting a room from you.

1. Do you have the first month’s rent and security deposit amount ready today?

If they have any excuse why they don’t have the money ready today, politely ask them to call back when they do. Some may see this as being too harsh yet it’s not. 

Having high standards attracts the right person who will rent a room from you. It doesn’t matter if they are waiting on their next paycheck for some extra cash from a bonus or any other $2 excuse. 

If they answer with a resounding “yes, I have the money ready now” then you can move on to the next question.

2. How long have you worked at your current job?

I only rent to people who have been at their job for at least 6 months. I’ve seen that if someone is unreliable at a job they cannot keep one. This means they may not pay on time no matter how much rent they are required to pay. 

Ideally, you want to find someone who has had the same job for at least one year.

3. What’s your normal daily schedule?

When someone is renting a room in your house you want to make sure you have similar sleep schedules. If you work a normal 9-5 do your best to only have a room rental with someone who shares your schedule. 

I once had a roommate who worked the night shift and would come in early in the morning and wake me up. Not fun at all. 

Tip 5: Call Their References

Trust is to be earned, not given freely. Simply because they give you a phone number to a manager for their job, make sure to call them and see if it’s one of their family members posing as the “manager.” Make sure to do a quick internet search and call their employer from the number listed online.

When it comes to room rentals, you’ll have a college student who thinks they can pull one over on you. 

Not today, Jack! 

But seriously, verify everything. When you have their pay stubs, call the company and verify their employment start date. This is when you have to put on your property manager hat and do some investigating. Renting out a room does take some work and this is it. 

You don’t want your desire to make extra income to cause you to take shortcuts because you’re desperate.

Tip 6: Never Negotiate The Price

I laugh out loud when someone wants to barter with me on the rent price. Whenever I listen to someone saying this over the phone I want to ask them “the rent price is not like a used car, it’s not changing.” 

Nonetheless, you may have someone who thinks they can get a “deal” on the room. I don’t lower my price, ever. The person who wants you to lower the price is most likely the same person who is going to want another concession. “Can I pay rent on the third instead of the first, it’s more convenient for me.” 

No, no no! 

Avoid having to go through the eviction process with a tenant like this. Don’t rent to them in the first place. Eviction laws are no joke!

Tip 7: Have a Written Rental Agreement

Landlords who have written rental agreements win. When renting a room you want to make sure you put everything in writing. This is also called a lease agreement. 

Even though you’re only renting your spare bedroom you still want to make sure you have a clear room rental agreement. Treat this as a rental property that you happen to live in.

I have never had to go to small claims court yet I’ve seen how if/when you have to go to court when you treat this renting out a room in your house “business” as a real estate investor you will be ready for that day.

In your rental agreement, you want to include several things. The security deposit, how/when to pay rent, any disclosures for the fair housing laws and what happens if they default (don’t pay) on their rent payments. 

You want to check any city zoning laws if you live in an urban area also. In some places, you must follow certain rules to rent a room in your house. 

Best to do plenty of research on zoning laws to make sure you comply. 

Also, if you have a homeowners association it’s best to read your bylaws and make sure you are allowed to have a tenant living in your home.

Tip 8: Sign A Roommate Agreement (House Rules)

The roommate is different from the lease agreement. In this agreement, you’ll go over the “house rules” and how to handle normal tenant issues. 

• Do you want the house to have quiet hours from 10 pm to 6 am?
• Are you allergic to pet hair and don’t want any pets in the house? 
• Do you want to allow your roommates to bring overnight guests?
• Do you want the laundry room and any living space only to be used during the day?

This is very personal and you’ll have to find out which rules you want in your own home. This is your primary residence, remember! 

Tip 9: Buy the Right Insurance

You’ll want to check with your insurance policy and even call your insurance provider to ensure you have coverage for a roommate. Don’t let this one slip through the cracks. 

Some policies allow renting a room to one person and some don’t allow renting out a room at all. 

Don’t assume because you have a security deposit that will cover anything they might do to the rental space. 

The last thing you want is something bad to happen and you have no coverage from your insurance policy. 

If your current policy doesn’t cover roommates, consider searching for an independent insurance agent in your city who can give you a quote from multiple insurance companies. 

You want to make sure as you generate extra income you will be covered in case of a loss. This is one of those rental expenses that you don’t want to skip.

Tip 10: Check-in Regularly

Simply because they rent a room in your house doesn’t mean you can’t be friendly. I always have this policy: be friendly, not friends. You want to make sure you’re cordial yet always keep healthy respect and distance. You don’t want to become best buds only to have them not pay rent on time because “we’re best friends. Let me off easy.” 

Final Thoughts

When considering renting out a room in your house you want to make sure you’re proactively prepared. I’ve seen many new landlords renting out a room for the first time become reactive because they were not prepared with a lease agreement or didn’t read up on their state’s landlord-tenant laws. 

Not knowing what regulations govern your area can land you in legal trouble. Remember to do plenty of research before you decide to rent a room in your house.

If you are unprepared, it makes for an uncomfortable environment for everyone involved. 

Whether you decide on renting out a room or multiple rooms in your house these tips will help you get on the right path. 

Happy Landlording!

Max at Max My Money