Renting a Room in Your House – Earn Extra Income but Don't Be Stupid

Renting a room in your home may seem like a great way to increase your income at first glance. Getting extra help (without doing too much) appears to be a viable option for most homeowners, especially if you're struggling financially.

You open up your home, supply a place for someone to live, and get paid! Sweet deal, right?

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Things go along great until one day your renter starts causing problems in your home. Are you protected?

It all depends on whether or not you have properly prepared for the unexpected. Did you do your homework first, before allowing this person to live with you?


  • Depending on the room/area you have to rent, you can make a good income from a renter and increase your income. If you have a private room with a private bathroom, you can earn even more money. Your location means a lot to any potential renter also. If you live in an area close to businesses and schools, you can raise your rent accordingly.

    But there are potential pitfalls.


  • You will in many ways, be giving up your privacy.

  • If the renter causes problems, your home will be disrupted.

  • Your bills will increase exponentially.

  • If something’s not working properly in their room, you must have it fixed.

  • If your renter breaks something, you must also fix that.

  • If your renter has access to your living space, you will need to lock your valuables up in a safe place, which can be an inconvenience.

    In most states there are very few zoning or legal issues around renting a room in your house, but it’s good advice to talk to your insurance agent to make sure your homeowner's policy adequately covers you.

    Craigslist reports that room rental listings have almost doubled in the last couple of years as more people look for ways to make extra money. But the simple truth is that most people are amateurs about rental issues. That’s why you need to make sure you protect yourself before opening up your home to a total stranger!

    Whatever you do, you need to make sure you're behind is covered before you even think about renting a room in your home. If you're looking for a new home, having a spare room above the garage (called a FROG room) is a great way to earn extra income and maintain your privacy. It's something to consider anyway.

    But remember that renters are just like vampires. Once you ask them to come into your house, they are very hard to get rid of!

    Best Practices to Renting a Room

  • Know thy renter! You must be able to (somewhat) trust this person if they’re going to have a key to your house or room. Do a tenant background check on anyone BEFORE allowing them to move into your home. You don’t want to invite Ted Bundy into your home, do you?

  • Do a credit check. If your renter has horrible credit, you may not get your rent! You can find this type of service at It doesn’t cost a lot for the basic package, but it’s a great investment!

  • Get a copy of their Drivers License and write down their license plate tag. Keep this paperwork with their lease.

  • Have a dated formal lease, which must be signed in agreement with your renter. This is the MOST important part of renting a room. (A simple rental agreement is NOT enough!) If you don’t have this paperwork and all the rules of renting a room in your home outlined, you will be setting yourself up for problems down the road. Having to evict a renter in your house, is a very stressful situation. If you’ve got family or friends living with you, its even more stressful.

    Considerations for Legal Lease Agreements

    You can find an online lease or you can hire a lawyer to prepare one for you. Either way, a lease is a MUST HAVE legal document that keeps you safe! Simple rental agreements are simply not enough protection. Magistrate judges do not view them as legally binding in most states.

    When renting a room, any and all areas of concern need to be well defined and agreed upon before anyone ever moves in. These are some questions you need to consider!

  • Will you require a deposit? This is a good idea if you supply the room with equipment (TV, DVD player, etc.) or your own furniture!

  • What does their rent include? Is their rent for one room (including a bathroom), or do they have access to the rest of your home?

  • What will be included with their rent and what will not be included in their rent? (cable TV, internet, food, etc.)

  • Do you want to become friendly with your renter or do you want to remain neutral? This is a HUGE decision. If you get to know this person and start telling them personal information, they could use it against you later. Be careful about what you say around them for this very reason! Things can easily be misconstrued and it’s better to heir on the side of caution and NOT get personally involved with the person whose renting a room from you!

  • Be cautious about how much you agree to help any tenant.

    If their car breaks down for instance, will you help them get it towed or be available in case they have a flat tire? If you help them once, they are likely to expect your help again! All of these decisions need to be made before you allow someone to rent from you.

  • Does your tenant work? If so, what hours do they work? This is especially helpful so you know when they'll be in or out of your house. If they don't work, how will you get paid? (Inlaws, disability check, etc.)

  • When you will collect rent? Will you collect rent weekly, bimonthly, or monthly? What date or day of the week do you expect rent?

    Speaking from personal experience, it’s best to rent for a couple of months at a time only and NOT have a long-term lease. Why? Because in most states, (if you have to evict your renter), you must give them time to move. If rental payments are weekly, you only have to give your renter 3 days to vacate the premises. If it’s monthly, you must give them 30 days to move out. If they refuse to leave, you will probably need a letter from an attorney’s office advising them to ‘vacate the premises’. Even then, they can appeal the case and prolong the process indefinitely.

  • Do you have quiet times you need to tell them about? If so, define the hours! Loud music can disrupt any house, but during sleeping hours, it can be soul wrenching!

  • Where are they allowed to park their vehicle?

  • Is their vehicle dependable?

  • Are they allowed to use the yard? If so, what areas?

  • Can they use your washer and dryer? Laundry is a big deal. If they are allowed to do laundry in your home, you should give them specific days that they are allowed to do it.

  • Food is also of great importance when you’re renting a room. Will you provide them with a separate refrigerator/stove/microwave, or are they allowed to use your kitchen? If so, you will have to provide sufficient space for them to store their food and refrigerated goods. Will you share your food or is their food to be separate from yours?

  • Can they invite friends over? If so, define hours, days, etc., so there are no surprises.

  • Is their room rental for one person only, or more?

  • How will rent be paid? Cash or check?

    If you have kids or animals in your house, its also good to know if your renter likes them. Don’t allow them to get too buddy buddy with your kids or your animals though. This is simply not good rental practice.

    Another step you must take is to keep a log of all rental payments. Give your renter a receipt for their payments each time they make one.

    One of the best sites you can use to protect yourself is The Landlord Protection Agency. This site is set up solely for landlords and is well worth the expense of their membership. (I wished I had seen this site before I ever rented a room!) You get access to all of their data base (lease agreements and more!) plus lots of articles and information on how to better safeguard yourself.

    This may seem like a lot of time and expense to take on before renting a room. However, you know the old adage! You’ve got to spend money to make money! In the case of renting a room, it’ll be a lot less money to spend than hiring a lawyer and taking your tenant to court.

    Recently, when I evicted a VERY disagreeable tenant who was renting a room in my house, (and had not safeguarded myself), it cost me over $2000 and took 90 days to get her out of my house. Plus she got to live in her room rent free for over a month, which was totally bogus. Having an unwanted tenant in my house made me feel like a hostage!

    I trusted her because she had been a good tenant for almost a year. I was totally blindsighted and never thought that I’d be in this position. It ended up costing me a lot more money just because I didn’t have a signed, legal lease.

    Don’t be a victim. Keep bad renters out of your home by doing the research first before renting a room! You may never have any problems but if problems do arise, you will have legal grounds to get that person out of your house a lot faster, without it costing you a lot of time or money. Your peace of mind is worth its weight in gold!

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