Do you need some spare cash? Is your main source of income just short of what you need? Try a side hustle such as renting out your spare room to make up the difference.
What you Need to Know to Earn
First off, renting a spare room probably isn’t going to allow you to quit your day job, but it can certainly bring you in some extra income! Some people rent out multiple rooms in their home and pay their mortgage each month with the rental money. You could even pay your house off this way!
But, before you just let any random stranger move into your house though, there are a few things you’ve got to consider. If you are planning to rent short-term like for a few weeks, then check out Airbnb. Those who rent through Airbnb make a lot of money just for short-term rentals. If you are thinking more long-term, then take a look at some of our suggestions.
Are You Allowed to Rent?
The area you live in may have specific rules and regulations for renting a room. Make sure to look those up and follow them carefully. Also, some neighborhoods that have a homeowner’s association don’t allow rentals at all. So, check with your local association.
How Much Should You Charge?
You certainly want to make some money from your rental and not lose any, so it’s important to do some research before deciding on a rental price. Think about how much wear and tear and maintenance will cost you and make sure to factor that into the price you set. Do some online snooping and see what room rentals are going for in your area and what they offer and how your room compares.
Decide if you are going to include utilities or split them with the renter. Keep in mind that including them can be easier, but the renter may not be as conscious of the water and electricity they use. If you charge the utilities separately, the renter will probably pay attention to what they are using and be more conservative.
Get The Word Out!
If you want someone to rent the room, they have to know about it! Posting an ad online will get the word out, although posting an ad in the newspaper and having a sign on your lawn can also be very helpful. Craigslist is a great place to post rental offers. Tell the truth about the room you are renting. Include the size, amenities, and pictures of the room, so the renter knows exactly what they are getting so you don’t waste your time or theirs.
Since you will be living under the same roof, you need to meet the person before they move in! This way, you help to avoid possible conflicts, creeps, and crazies. Yikes, no one wants those.
Talk on the phone and ALWAYS meet in person so you can make sure you will get along. Conducting a background check isn’t a bad idea either, and might give you added peace of mind.
Set House Rules
Before the person moves in you must make it clear what you are comfortable and uncomfortable with happening in the house, If you lay down the rules right from the get-go you’ll avoid fighting, misunderstandings, losing your renter (or your mind) and the like. Discuss:
- Who is responsible for cleaning what?
- When is rent due? Can they pay in installments?
- Who buys trash bags, toilet paper, paper towel, hand soap, cleaning supplies, etc.?
- What is the tolerated noise level?
- Are utensils and food shared in any way?
- Can friends come over?
- Are there off-limit areas of the house?
- Are parties or BBQs allowed?
- Is there storage space?
- Are pets allowed?
- Will you share kitchen/fridge space?
- Is alcohol allowed?
Make a Contract
Any legitimate apartment building or condo will have their tenants sign a contract. Although you’re just renting a room in your house, it’s a good idea to have your renter sign a contract.
Even if you are renting to a family member or friend, a legal document will help avoid conflict and confusion. It’s also a way you and the renter are protected and have peace of mind. You can stipulate when the tenant will pay rent, promise to follow the rules, etc.
You may even have a disclosure in there for yourself that allows you to terminate the contract or rental agreement under certain circumstances. It’s pretty easy to create a contract, too! Try LawDepot.com.
Earn that Extra Cash Now!
Once you’ve done the steps we’ve talked about, you can get your renter moved in and let the money roll in!
IF YOU ARE NEW TO THIS SITE:
If you are looking for help to set up a budget, learn to budget in just 5 easy steps. Come back soon for more money management advice from a professional accountant, entrepreneur, and college instructor. Learn to prepare your own taxes, start a business, budget, be frugal, make more money, save money, and so much more! Sign up below for your free copy of The Modern Mom’s EPIC Guide to Easy Budgeting.
Don’t forget to Ask the Accountant if you have specific money questions. Get free advice from an accountant just by asking. Free to all subscribers.
Get Your Free Copy Today!
The Modern Mom’s EPIC Guide to Easy Budgeting! 28 Page Workbook with 87 ideas to reduce expenses, 14 beautiful worksheets, 7 bonus lessons, and full, easy-to-follow instructions. Includes top advice from a professional accountant and university instructor.