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Renting out a room can be an excellent way to boost your income while also helping to pay off your mortgage. However, managing any rental property or space requires the right mindset for success and to prevent complications. When you rent out a room in your home, you take on the role of a landlord, and with that comes specific regulatory and legal responsibilities that you need to understand.
Failure to comply with these regulations can lead to situations where you have difficult-to-evict tenants or expose yourself to potential legal issues. Let’s discuss how to rent out an unused room and the steps involved in the process.
Before promoting your space, keep in mind that you’ll need to determine how much monthly rent you want by considering the following costs:
- Utilities
- Square footage
- Amenities (laundry, kitchen, bathroom)
- Parking situation
- Average rent in similar spaces and neighbourhood
The last thing you want to do is undersell your space or overcharge and potentially scare away renters who would otherwise be interested. Don’t hesitate to speak with other landlords in the area to get a sense of what they charge for renting out a room.
Advertise the Space
You’ll need to advertise your room to potential renters. Workplace notice boards are a great place to start. Additionally, consider reaching out within your network of friends and family to find a suitable roommate. There are also many online platforms and companies that can help you advertise your space, allowing you to list your room for rent to a broader audience
Draft a Lease Agreement
Make the house rules and agreements clear, and include them in the rental agreement. Ensure that both parties sign this document. Once established, avoid changing these house rules unless both parties agree in writing. A rock-solid lease agreement is an excellent way to protect both yourself and the tenant.
You may want to consider requiring your tenant to have renter’s insurance or asking for a damage deposit before permitting them to live there. Depending on where you live, lease agreement requirements for renting out a room can vary. Be sure to familiarize yourself with local regulations to ensure your lease agreement complies with all necessary legal standards.
Prepare the House
Before renting a room, you should inspect your entire home to ensure safety and that your property meets all applicable habitability criteria.
Some considerations:
- Each bedroom door should have a keyed deadbolt installed
- To avoid lockouts, remove self-locking doorknobs
- Put your valuables in a safe or lockbox
- Appliances, stair rails, fixtures, walls, and flooring need repair or maintenance
- Make sure the room is a legal bedroom suite with windows and the required safety precautions
Choose the Right Room to Rent Out
Check Security and Safety
Location and safety go hand in hand. For most tenants, a safe atmosphere is a tremendous motivator. It can be challenging to sleep at night if you’re worried about your safety or the security of your belongings. As a result, researching crime rates is essential if you’re considering renting out a bedroom to a tenant. Adding an alarm system or other security features to your rental property is a cost-effective approach to making tenants feel safe and secure in any neighborhood.
Find a Property Management Company
Rental and property management companies take full responsibility for a property throughout the contract’s duration. These specialists play a critical role in the real estate sector by providing stability and serving the needs of both tenants and owners. One of the most vital tasks is to close the gap between property demand and supply.
Install Necessary Appliances
A homeowner expects to spend on appliances and upkeep, whereas a tenant does not. New appliances are particularly appealing to tenants as they reduce the likelihood of a machine breaking down at an inconvenient moment and requiring coordination for repairs. Many tenants are willing to pay higher rent if the property includes an in-unit washer and dryer, as doing laundry at a local laundromat can be both costly and time-consuming.
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