We have often suggested renting out space in one’s home as a strategy for increasing income and cutting housing expenses. Naturally, this is much easier said than done, so we’ve been offering some posts about what goes into renting out part of your house.
Here are some important Dos and Don’ts when renting out space:
DO understand your rights and obligations. You should talk to a HUD approved housing counselor to understand everything that will be required of you as a landlord, and how to protect yourself if the rental relationship goes bad.
DON’T discriminate when reviewing applicants. You can break the law by asking inappropriate questions. You can’t discriminate because of race, religion, gender, sexual orientation, family status, disability or age. Best to avoid bringing these subjects up when interviewing applicants.
DO treat being a landlord as a business. This is a source of income, so it should be treated as seriously as any other job you do for money. Understand that there are tax implications for renting out a room, and you’ll have to pay taxes on everything you collect (even if a tenant reimburses you for utility expenses).
DON’T expect perfection. Your tenant will change your life; you won’t have as much privacy as you are used to, and no matter how considerate s/he may be, your renter will occasionally make noises in the middle of the night. Be prepared to make some sacrifices if you plan to enter into this kind of situation.
DO put everything in writing. We’ve repeatedly stressed the need for a thorough, detailed rental agreement. Make sure your tenant understands all of the terms of the lease and follow through on enforcing all of the terms in your lease, including late fees and other penalties.DON’T be a bad landlord. You will be expected to keep the property in good repair and up to all legal codes regarding health and safety. You should also be careful to respect your tenant’s privacy and legal rights.
Being a landlord is not an easy task, but you can make it work if you are diligent and think everything through carefully. Do all of your homework in advance before you invite a renter into your home.