Another month has come and gone and you’ve just barely been able to squeak on your mortgage payment. You breathe a sigh of relief, but already you’re dreading next month, when the financial anxiety hits again.
If this sounds like your life, you’re not alone. Thanks to the recession, many people are just barely getting by right now. Month after month they frantically find ways to pay their mortgage and put food on the table. It’s a stressful and dispiriting situation to be in.
But there is something you can do. Rather than risk losing their homes to foreclosure, a rising number of struggling homeowners are choosing instead to rent out a room to help make ends meet. And while this may seem like a drastic measure today, opening a home to boarders was common practice just a century ago. Taking in boarders is an easy way to help pay bills and ensure a family’s survival.
So, how can you rent out a room, while still making sure your silverware and family’s safety stays intact? Here are six steps to ensure a comfortable boarder situation where everybody wins.
1. Look at Your Space
Before you do anything, identify the room, or rooms, you have available to rent out. Rooms with access to a private bathroom, or “basement apartments,” will get you more in rent than smaller bedrooms. If you really need the cash, you might want to consider moving out of your master suite (if it has a private bathroom) and into a smaller room.
2. Check Local Rents
Do you know how much other rooms and apartments are going for in your area? Use a site like Rentometer.com to see how much you can reasonably charge for rent based on your zip code, and local rates.
3. Place Your Ad
You can place an ad for your rental in your local newspaper, but you’ll probably have more success using a site like Craigslist. When creating your ad, be specific about the room; pictures will get you more response than a text only ad. Also, make sure you’re clear on what kind of access the tenant will have to the kitchen, bathroom, and backyard. If your home has perks such as a pool or hot tub, make sure you include them in your ad if tenants will have access.
Last but not least, be specific about who you’re looking for and what rules, if any, your tenant will have to live by. For instance, you might want to open your home up to a college student. You might request that they keep the noise down past 10 p.m., or that they be a non-smoker. Some homeowners with children commonly look for female renters only, and require they have no overnight male guests.
4. Personally Interview Applicants
Once you start getting calls about your ad, it’s up to you to personally interview each applicant. During the interview, request to see proof of employment or student status, and ask them about their living habits. Trust your instincts here. Go with someone you feel comfortable with, and whose habits closely mirror those of you and your family. It’s also important to call the references they give you. Check with their past landlords to see if they paid rent on time, and if they left their apartment in good condition.
5. Do a Credit and Background Check
Once you’ve found a tenant you think might be a good fit, do a credit and criminal background check on them. There are many sites that offer this service including Equifax Identity Report, which costs around $10. Although it may seem like an extraneous step, doing a credit and background check is money well spent, especially if you find out your potential housemate has a rap sheet.
6. Set Boundaries Up Front
Once you find a boarder you like and trust, it’s important to set up boundaries from day one. Create a rental agreement, which both of you sign, that details the particular details of your living arrangement.
For instance, will your boarder pay a flat rent fee monthly, or will they be responsible for a portion of the utilities? How, and where, will food be stored? What about access to other common living areas? All these details need to be worked out, and discussed, before your tenant moves in. Also take a look at the Landlord and Tenant Act for your particular state to see what rights you and your tenant have in the arrangement.
Although renting out a room in your home may seem like a drastic measure, it’s actually becoming more commonplace as homeowners look for creative ways to help make ends meet. And who knows? You might even find that you like having a boarder in your home, especially if you’re single or an empty nester.
Have you ever rented out a room in your home? What was the experience like? If not, would you ever consider doing so?