6-Step Guide to Renting Out a Room in Your House – Should You Do It?

extra roomAnother 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.

Final Word

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?

  • http://sustainablepersonalfinance.com/ Sustainable PF

    We rented a room for a few years when I first bought my last house. It didn’t work out so well.
    The first boarder was a slob in the kitchen, had no idea (nor did she clue in) that the dishwasher stacking can be optimized and she left laundry in the machine + dryer. I do not think it proper for a male landlord to be rifling through a female boarder’s undergarments in order to get my laundry done.
    The 2nd boarder never used the kitchen (yay!) and was great about laundry. Thing is, she got take out a lot and little did I know she was accumulating bags of garbage and hiding the smell with glade plugins. Ew.
    So be careful – you are agreeing to share your space. The money is nice but may not be worth the headache(s).

  • http://www.moneyistheroot.com Justin @ MoneyIsTheRoot

    Obviously if you cant, or barely can, make the mortgage payment then you need to figure out a solution quickly. I currently rent a room of my home to a friend, though honestly he has free reign over the home as much as I do. Sometimes even living with a friend can be difficult, I cant imagine how living with a total stranger would be. In the end do what you must, but think twice before you pull the trigger on this option.

    • http://twitter.com/Will_Helps Will Helps!

      Justin your definitely right…But you could always sell your house as is.

  • http://www.chronoscoffee.com B

    Craigslist says you can’t discriminate when posting. I’m curious then how to go about being selective, in reference to you statement that “…homeowners with children commonly look for female renters only,” which is important for some people. TIA.

    • dawm

      I wanted a female so i stated that it was a safe place to hang your purse

    • Jonas

      That’s really weird because the entire process of selecting a tennant consists of nothing but discriminating. It’s basic common sense to discriminate against people with criminal records, bad credit and non-payment of rent.

    • Cory Youngblood

      Just don’t advertise it. All there is to it. I won’t rent to couples or anyone with a past eviction or any kind of criminal record beyond traffic violations,but I don’t advertise that. And trust me couples are a nightmare.

  • Michelle

    I went back to school last year, and we rented out 2 bedrooms in our home. It was the WORST experience ever. We made very clear boundaries that the one girl living with us just could not seem to abide by (for example: the basement was off limits so that we could have one totally private area – and she was constantly coming down uninvited). The other girl, it turned out had never lived outside her parents’ home and decided to REBEL. She disappeared for a week and we got the phone calls from her WHOLE family that whole time and when she did return she would have a different guy picking her up every night (we told her NO overnight guests after one creepy drugged up guy slept over one night). The “no boundaries” girl was also extremely loud and didn’t seem to understand that… eventually she got pissed off, went crazy and left one day (best.day.of.my.life). The other girl’s parents picked up her stuff about a week after we wanted her out… HORRIBLE 8 months. NEVER AGAIN. Definitely not worth the money every month!

    • Good Tenant

      I’ve always wondered what these crazy people who write ads stipulation “no overnight guests” look like in person. I can’t imagine paying rent at a place where I was controlled by ridiculous rules like this that step over the limit. Obviously you shouldn’t have been renting out your rooms, but got greedy and decided to make some cash anyway, while creating strict and oppressive rules that you would not abide by yourself in a comfortable home environment.

      • andrea

        First of all I have rented out my home several time, and as a home owner it is your right to make stipulations. This is your house, you can make whatever rules you want, it the tenant dosent abide then they leave. I too put no over night guest.

      • crazy people

        our neighbor didnt stipulatethis, the girl ended up turning tricks…if they had that stipulation, there wouldve been no prostitution ring!

        • Jonas

          Illegal activity is grounds for eviction under all circumstances.

      • Dong Wang

        good tenant you seem to not understand this conversation about renting out a room in a persons HOME. not an apartment. they have every right to stipulations. i have a young child and would not allow drinking, smoking, multiple guests, overnight guests, loudness beyond a certain hour etc… you sound very childish and entitled

        • Jonas

          Donna you sound like you want to control how the people who are paying you rent live their lives. I personally would never rent from a person with your rules but you have a right to make your own rules and potential renters can decide for themselves if the costs of adhering to them outweigh the benefits of renting the room in your house.

        • Landlord

          Someday maybe you will have a home which you will have worked long and hard to buy. Perhaps then you will see through a different set of eyes. Renting does not give you unlimited rights.

        • Cory Youngblood

          Amen! And I’m finding myself getting more and more angered by some of these comments from room renters.

  • Heather Levin

    @B- I’m not sure. It seems like you’d be able to state a preference for something as personal as finding a roommate. After all, job posting and personal ads state a preference for candidates, so it seems like it’d be ok for roommates as well.

    @Michelle, I’m so sorry you had such a bad experience! It definitely sounds like it was NOT worth the money for you and your family. :(

  • J G

    I’m curious as to the general state of laws for evicting a boarder or roommate. Do the courts generally treat it like any eviction or is there something different about the more intimate relationship of sharing living space?

  • http://[email protected] AW

    I had a great experience renting a room about 3years ago. I’m an female engineer and was temporarily relocated to Alabama for a project. I got sick and tired living in hotel rooms so I posted on Craigslist. A female about my age responded to my post. We used a standard lease agreement that detailed what I had access to (pretty much everything but her master bedroom suite) and how I would pay (paypal so I could put it on my expense report). I got to stay in a very nice house for less than my hotel. Also, she showed me around my new temporary town. The deal worked out very well and we’re still friends.

  • ATP

    I believe you can discriminate if it is a roommate type of situation- where you will be in a same unit and sharing common areas. If you are renting out an entire individual unit like a whole 1 bdrm apt, you cant discriminate. Like female requesting to live with other females is totally normal.

    I say if you are renting out a room and you are past certain life stages, try to rent to someone past those stages as well. I am past the cheap cluttered college stage and was stupid enough to room with college students once upon a time and that was horrible. If you are a working professional, try rooming with another working professional or maybe a grad student. I’ve had horrible and awesome roommates, the bad ones are enough to scare me to living solo for awhile. Trust your gut and get someone who is actually mature if you want to keep your sanity.

    • eze60

      I would be careful with that. I gave this 48 year old woman the benefit of the doubt. I rent to others in their 20s who are perfect. So she does not fit the norm in the house; but I wanted to be liberal thinking and giver her a chance; that was a bad idea. And contrary to her words that she’d be working on the field and not too often at home, ( my bad for not doing a strict background check.) she turned out to be a sloth who only leaves the house to go buy food and boos and cannot pay the rent; but yet she can afford to watch direct tv all night long while inflating the monthly electric bill;I am in the process of evicting her. But each day of knowing that she’s holding that room hostage feels like eternity in my intimate environment. It may take 6 weeks for her to be taken out legally. FYI in NYC the housing system allows tenants to get away with murder and can be systematically slow to getting someone out. So be really carefully and check credit and contact previous landlords if possible. Some people know how the system works and are looking for a free ride.

  • TomJax

    What about taxes? I rent a room to someone month to month. Between 4-5K a year.
    Do I have to pay taxes quarterly? Or just wait until when I file my taxes.

    • holly

      I wouldn’t claim it, honestly.

  • Jack

    A question for you! An elderly couple (75 & 69)and a dog with a 5-6 bedroom house. 2 sm.bedrooms up with 1/2 bath, bed-dresser- cable heat included. 1 on first floor (same but full bath)
    We would like to suppliment our income but have no clue as to how to do so safely, hench this writing and possible suggestions.
    Thanks jack

  • http://www.rentingoutrooms.com/ Mike Choi

    Renting out a room is a great way to make some extra cash. I’ve been renting out both of my spare rooms in my townhouse for the past for several years. With the rental income, I’ve been able to pay for graduate school and pay down a good part of my mortgage debt. I encourage everyone to try it out

  • Kayceemarconnet

    Me and my husben are buying our first house and we are have 2 of our friends move in for a little while we are getting together a rental agreement and stuff do you think this is a good idea.

    • http://twitter.com/Will_Helps Will Helps!

      It can be a great idea but…there are major headaches in renting out rooms.

  • http://www.rentingoutrooms.com/ Mike

    I’ve been renting out my rooms for the past several years. I started out with just one roommates after things were working so well I rented out my second bedroom. With the rental income I’ve been able to pay for graduate school. Since graduating, I paid off my second mortgage with the rental income. With my experience in renting out rooms, I started blogging about it.

  • Mj

    Are there applications on line that can be used for renting rooms out in one’s house?

  • Jacygem

    My husband and I decided to rent out a room to college students this past August. Long story short, great honeymoon period for a month and then the fun started. I never had such problems with my own sons and finally gave this kid notice this past week, day after he almost set our house on fire! Worst experience and not worth the extra money, besides it cost more in the long run with the 30 minute showers, leaving lights on, not locking our front door, leaving water running in the bathroom, not cleaning up his dishes in the kitchen – had ants 2 times to content with in my kitchen…. need I go on? A total nightmare and cannot wait for him to leave after the 30 days notice. These young kids today have such attitudes that they are entitled even though it is not their home!! Be careful and really think long and hard about the headaches. I will NEVER do it again!

    • Kris

      You sound like an insane person. Of course he is entitled to take showers and use electricity, he’s paying you rent. Why would a selfish person like yourself ever open your home to another individual? Oh right. Money. Why don’t you do the whole foster kid thing? I hear it’s a good mine. You’ll fit right in.

      • Dong Wang

        Kris you are an idiot. Did you read her post? The person was filthy and wasteful.

        • Cory Youngblood

          Amen on that!

    • Jonas

      Old grumps like you are the real problem. I can’t believe that you called this guy “entitled” in such a negative tone. He is paying for the use of this space he IS “entitled.” If you let him stay with you for free then you would have a right to complain but as long as he is paying you the agreed upon rent he is entitled to use the living space.

      Sounds like you are not a good candidate for communal living. You want to control other people’s behavior too much. Looks like you will have to pay the full amount of costs associated with your living space because you don’t like living with other people.

      • Cory Youngblood

        It’s not communal living. The kid rented a room. The first time I saw an ant is when I woulda got him out. Did you not read the whole post?

    • saveourplanet22

      You should be using LED lights (pennies in electricity). For showers, use a water saver shower head and switch temperature on the hot water heater to “very warm” rather than hot. Those things naturally encourage shorter showers. Things like locking door should probably be in the lease.

    • Mike Green

      when they do stuff like that — give the eviction notice — don’t hold back — there are good renters out there –get the bad ones out of your home

    • Lil25

      It is their home if they are paying rent.

      • Bob

        if they respect you and your home otherwise fuck em

  • Jay100

    Heather’s right interview, background an trust your instincts an always set the rules upfront. But you still will have issues with your tenants, confront the issue an go from there. I’ve been renting out room for 6 months now an believe me it’s alot easier then worrying about how you’re going to pay your bills.

  • rentbin


  • Ryan

    I rent out both rooms to the same person. Give them the hall bathroom and hall closet and attic storage space and shed access. We share the kitchen, dining, living room, and office. I find it is appealing to some people to give them more space for a little more money so I make 700 a month from the same person on a $1120 mortgage and I pay all the utilities, which is about 300$ a month. That has me paying out about 720 a month instead of ,1706 (car payment included), which freed up money for new carpet, a fence, shed, refinished the deck, pest control, trash pickup, etc etc.

    You just have to be really picking about your tenants. Look for single people with no pets, or easy to care for pets who look responsible. They should also have jobs, not be living on parent funds or pell grants. You don’t want someone in your house 24/7, them having a job is great because they will be gone 8 hours at least 5 days a week. Gives you some needed alone time. And try to be picky about what they do for a living. E.g. living with a nurse is hard if your a 9-5er, they rotate, up at the crack of dawn one day, sleeping at noon the next.

    It works out really well if you work 9 to 5 and you find a roomate that works graveyard, say 2 am to 8 am. Their at work while you sleep, and your at work while they sleep.

  • saveourplanet22

    I have been renting out my basement and it has gone well. Money is tight so I am planning to rent an upstairs room, but it will encroach more on my private space. Wish me luck. I hope this will help me to replace roof and eventually windows.

    • WhereDeDoDatAt

      I hope it goes well for you…learn from my mistake, be sure to rate according to utility usage. I have rented my room $350 utilities and laundry included. In two weeks …she has used up more than she has paid. And got mad when I asked her to minimize her usage to moderate. She is retaliating by running the humidity fan in her bathroom for hours on end.

      • Maria

        I am setting up a fixed rate with my power company…as long as you have lived at your place for 12 months, you should be able to do that as well. My fixed rate is $157 a month no matter what time of year & no matter how much power a roommate uses. So that’s a thought maybe…

  • WhereDeDoDatAt

    Thank you for the article/advice…I really didn’t know about the Rent0meter. I let my boarder move in before signing the written agreement, although she agreed verbally. She has only been here two weeks and already not abiding by the agreement and refuses to return the written agreement signed. When I left messages for her to clean her mess in the kitchen (one of my main policies mentioned during the showing), and to minimize her use on the space heater (My heat remains on 71 degrees, and she’s sitting in her room at 90 degrees in a tube dress….REALLY!), she came and awoke me from my sleep fussing and cursing me. I was so provoked that I called the police. The next day I went to the court house because I want her out of my house…still working on this one. Young people have issues, even if they are college students. This newest young breed really think it’s their way or no way while in your space.

  • fierce bori

    gosh I’m so lost cuz I’m seriously tried of getting played meaning I’m 2 NICE !!

  • Mike Green

    here is the way of how to do it….

    make rules — if they don’t follow – give them a chance to rectify — then give an eviction notice

    DON’T EVER ARGUE WITH THEM! — they are professional a-holes — they will win every argument — just give them the eviction notice and watch them suck up to you — they dont want to move — or else they would have done it in the middle of the night

    • Mike Green

      ha ha ha! I just saw my own advice that I put in a couple of months ago…

      boy, am I glad THAT GUY is gone!

      seriously, don’t rent out rooms – its just not worth it

  • http://www.coralseamercantile.com.au Coral Mercintile

    This is a truly comprehensive and great posting concerning a topic that a lot of people have so many questions about.

  • http://www.fifocapitalcoralsea.com.au/ fifocoralsea

    Awesome article! Thanks for taking the time to write it.

  • Jared Townsend

    Great article! I am curious though about knowing how much to charge? Using the Rentometer site, it seems it doesn’t take into consideration a “shared” environment. For example, it asks how many rooms and spits out a number. But Renting 2 rooms in a 4 bedroom house is dramatically different than renting out a 2 room house tom someone. Is there a site more suited to renting out rooms within a house?

    Also, I liked you advice about specifying what type of renter you are looking for, especially when one must consider children also living in the home. However, Craigslist makes it very clear that specifying such details as race, sexual orientation, etc. is considered discrimination. Can specifying a gender in the ad itself also be considered discrimination?

    • dulcinea

      When I went to place my ad on Craigslist, it said that specifying certain things, like “no couples”, or requesting a specific gender or age group is illegal.

      • Patricia Williams

        Usually not illegal when the space is occupied by the owner. That is illegal when the owner is not a co-inhabitant.

    • Mike Green

      here is some advice:

      set the price high – if no one takes it, drop it by 50/month and try again,
      ask a lot of questions – just to see if they will answer questions!
      (if you get lip or backtalk, decline them – it is a bad sign),
      younger people move often, older guys are more stable,
      never rent to smokers – they always smoke in the room,
      drunks? -> never, occasional beer? – usually occasional beer people are really drunks – you have to figure that one out,
      “I just quit smoking” – decline – they are lying – if they did quit, they would have done it last year,
      they must have income – from somewhere – always check,

      don’t specify what kind of person you want in the ad…
      talk to them to find out what they are like – you always can say ‘no’

      1st problem with them – give one chance, then if they do it again, boot them out

      renting a room in your house is working a second job – keeping it all together — don’t do it if you won’t put in the time

      also, keep a knife or gun hidden – you might need to use it to save your life

      finally, if people were ‘normal’ – they would get their own apartment — when renting out rooms, you are getting the losers of the world

      hope this helps

    • BargainhunterX.com

      Check your local and state fair housing or roommate laws to see if you
      are in compliance. In most cases, the courts have upheld discrimination in selecting
      a roommate or boarder, just make sure this is the case where you live.

  • Tom Kelly

    Are tenants covered under my home owner’s insurance? Or do I need to add different coverage for a renter?

    • Mike Green

      never leave a paper trail — tell them that they are strictly on their own

    • BargainhunterX.com

      If you plan to rent, check your insurance policy then check
      state law. In most cases, anyone living in your home is covered regardless of
      what you tell the renter. However, you may be able to partition the renters
      area from the rest of your home under your insurance policy. You will still need to have landlord coverage in order to protect your home of damage, but the rental will need to purchase rental coverage for their personal belongings. You will also need to make sure this is in their lease.

  • Mima V

    I’m not sure if I could live with a stranger in my own house. I used to rent a room as a student, but now… it is different. It is much better if you have an extra apartment to rent, especially daily renting for tourists. Still you can be worried about property, but living with somebody is a very strange.

  • mary smith

    i rented a room (and finally two rooms) out in my 1200 sq ft condo.( HOA fees and costs went up etc). I waited until i was desperate, and it worked out so well I regretted not renting a room out right from the time i purchased the condo.
    I used CL for all my ads.
    I posted clear pictures, size of the room, and mentioned I was quiet.
    Say you will respond only to those who provide a short description of themselves in 3 sentences, mentioning1) their education and 2)where they work/what they do, 3)and their phone number.
    (If you do not number these items people do no take it seriously.)
    If you do not say in three sentences you will get pages.

    Then look for people who have been homeowners before or had their own apartment or seemed to have taken some responsibility for stuff like a garbage disposal and other things which you will be counting on them not to break in your house.

    I advertised by saying engineers have previously rented the space. Occasionally I mentioned words which would attract Indian engineers – sattvic environment (people interpret it as peaceful, vegetarian).

    After snafus with three women renters, i learnt: do not rent out to a younger woman whose parents did a lot for her (no real experience with responsibility). Do not rent out to an older woman who was dependent on her husband all her life and had no real job (potentially no real experience with responsibility Especially if she doesn’t make a lot of money – she will resent your income and life. Especially if she had to bring someone else to help her make a decision, who was trying to get rid of her moochin at her house).
    Do not rent out to someone who seems like an old maid and criticizes something in the corner of a scrubbed out shiny shower. That person will find fault with everything, be resentful and a drag to have around.

    I would be careful of people who claim to be very religious and asks about your life, as a potential roommate. People who live a life close to God on the inside do not have to control other people on the outside.

    I bought my first car myself and bought my first house myself in my twenties. I have been picking up all the slack for my own life since 19.)
    After that i rented out to Indian engineers mostly. The only issues I had were with white (i’m a white woman) men.

    I was raised in a culture which was strict. My parents definitely didn’t sleep around and without talking about it they brought us up that that was not a smart or wholesome idea. I felt i would resonate with people who were brought up in a culture (not everybody who is Indian is going to have strict morals of course) which leans toward that which is wholesome. In my interviews i looked for people who are low key. I didn’t say no overnight guests in my add – but i said I had no overnight guests and I would like to share with people with a similar outlook. same thing but different. Now you are attracting a person with a quiet lifestyle, a certain way of living.
    While renting out you need an airtight agreement – my issues came up mostly when people ran heaters 24/7 (IN SAN DIEGO-WARM) in the winter and did not want to pay the electricity. You need to build a cushion in for that.

    You should ask about cooking habits- i had one person who messed up the stove with bad cooking practices. No daily elaborate cooking for hours. Maybe once or twice a week, and other short stints.

    My lessons: rent to professionally educated quiet men, with a wife or a girlfriend in another town or city where they go visit.
    Do not rent to someone in the job of marketing ( they are going to try and control outcomes with you, and potentially be a bull**tter).

    That said – as a landlord you should mind your own business, be easygoing, and if something bothers you remember the rent you are getting. Ask yourself if you are unreasonable. And of course if you have mental health issues do not rent a room out in your house.
    There will always be little problems – try to overlook it. Bigger problems should be taken care of right away in a nice way, or preferably mentioned in the contract next time with the next renter. Show some compassion – you have a person living in your space. It can’t be ideal for them either. I’ve made one long term friend and have had many happy moments, some unhappy moments, but it was a blessing to have that income.
    Don’t be afraid to rent out a room, trust your gut, and if you are not good with that have someone in your kitchen making tea while you meet your potential roommates to give you their gut feel.
    Renting a room will be one of the best things you did for your pocket book!