Did you know that 36% of households in the United States are renters? Considering that they make up more than 1/3 of the people in the country, that is a sizable market to try to get tenants from.
You may be someone that has an investment property. Or, you could just be somebody that has a house with extra space.
You may want to make some extra money so you could try renting out a room. However, you may be intimidated by the process.
Relax. This guide will teach you how to rent out a room properly.
Review Your Property
The first thing that you need to do is review the property that you have. Where would the best room on your property be to rent out to a stranger?
For example, let’s say you have a flat ranch that does not have an extra floor. It simply has two bedrooms, and you would have to share a kitchen, a backyard, and maybe even a bathroom with a stranger. Is this something that you are willing to do?
Now, let’s say that you have a two-floor home. One of those floors is the basement which has its own bathroom, shower, couch to use as a bed, and even a refrigerator.
The latter is most likely going to be the situation that both you and a potential tenant would occur. You have to look at your home and figure out what arrangement would give you both the most privacy while appealing to a potential tenant.
Review Your Market
The next thing that you need to do is review the rental market that you are living in. The reason why you should do this is that this will most likely determine how much rent you are going to charge.
For example, let’s say that you have a property in Tennessee that you would like to rent out. Throughout the state, the average rent is about $800 for a 1-bedroom apartment.
You may read this and figure you will charge around this price. Not so fast.
There are other factors at play here. That average is for the entire state. This means that the average not only includes the biggest cities but also rural areas.
So, what if your property is located in Memphis? Then, you would be likely to get more than the state average because it is one of the bigger cities in the state.
You need to keep in mind the state rental market but more importantly, the local rental market if you live in a notable area.
Prepare Your House
If you decide that you are going to rent a room in your house to someone, you need to make the proper arrangements to make sure the house is ready for both of you to live separately.
Usually, one of the first things that you will have to do is change the locks for some of the doors. This can be for doors to the basement where your tenant will live, the door to your bedroom, the door for the side of the house if they are using a separate entrance, and more.
Another thing that you may have to think about is what you are going to do with your valuables if you are letting a stranger live in the same space as you. Are you going to put them in a locked room? Or, will you get a safe to put those valuables in?
Something else that you should do is make sure that you make the proper repairs on your home before you allow someone to move in. This can be in both of your best interests.
If your home is free of repairs, you will have the ability to charge more in rent and less to worry about with your tenant. More importantly, it can be your responsibility as a landlord to stay on top of these repairs depending on what it is.
The point is, you should get these done before you have someone move in rather than let it come up while they are already there.
Prepare a Rental Agreement
This rental agreement is the contract that you are going to have a potential tenant sign. Here, you should cover all of your house rules and what the specific terms of the rent are going to be.
Some of the biggest things covered here are how much rent the tenant will give you every month and how long the lease is going to be. You can also include things such as what the utility bills are and what the initial deposit requirement is.
Something that you should not forget here is to specify when the rent is due every month. You should also detail what happens if the tenant is late with their rent and if there are any penalty fees associated with that.
Finally, make sure you clear the air about personal living policies such as if the tenant is allowed to have a pet and if they are allowed to have guests over. If anything, you may want to set a maximum time period for certain guests and discourage parties from being thrown.
Learn More About How to Rent Out a Room
These are just some of the landlord tips that you should know when it comes to how to rent out a room. Remember what to consider when preparing a rental agreement, do some research on your local market, go over what part of the house you want to rent out, and prepare your house for a tenant.
Do you want to know more about renting out a room? Message us with your questions today.
