A Guide to Renting Out a Spare Bedroom

June 9, 2015 by Michael Brown

beautiful living room in Houston residential rental home
Do you have a large home with substantial unused square footage? Would you be interested in learning how to increase your cash flow each month and help pay the mortgage? If the answer to each of these questions is “yes,” you may want to consider renting out a spare bedroom in your home. However, it’s not a decision to be made lightly. There are numerous considerations to keep in mind in order to maximize both profitability and personal safety.

If you want to be smart about renting a spare bedroom in your home, you need to prepare. Let’s take a thorough look at the process – from start to finish – to show you how to approach each step for the best results.

Preparing Your Home
Houston landlords planning to rent out spare room in their single family home

Unless your home is already designed in a way conducive to welcoming a tenant, you’ll likely need to prepare your home for this change. This could be as easy as adding a few finishing touches, or it may require a total transformation. Here are some of the factors you’ll need to think about, from a practical point of view:

Separate/private entrance. This is the most important logistical and architectural consideration. After all, you don’t want your tenant walking through your own personal living space to access their room. If the room you’re renting is located in a basement, or on the lower level, it’s possible that you may have an exterior door, on which you can change the locks to allow the tenant to use for entry and exit. If you don’t have an exterior door to the room, or it’s on the upper level, you may have to meet with an architect or builder to figure out a solution.

Access to a private bathroom. It’s also critical that your spare bedroom has access to a private bathroom. Ideally, the bathroom is in the bedroom or suite, not a hall bath that others use. However, if a bathroom isn’t already present, you may be able to cost-effectively add one (adding resale value to your property in the process).

Kitchen appliances. Your spare bedroom doesn’t have to have a full kitchen, but there are some necessities. For example, there should be some countertop space, a small refrigerator, kitchen sink, microwave, and, ideally, a stovetop.

Adequate parking. If you live in a big city, or in an area where parking is at a premium, you should also consider the parking implications of adding a tenant. Will there be space for them to park on, or near, the property?

There are certainly other, smaller details to consider, but these are the four main ones. If your property can work around each of these aspects, you’re an ideal candidate for leasing out a spare bedroom.

Marketing the Room
open floor plan in living room of Houston residential lease house

The next step involves marketing your spare bedroom. During this phase, you should review local rental rates. You can use a site like Rentometer.com to get a quick estimate, but be sure to perform a more in-depth analysis before reaching a decision.

Word-of-mouth may be your best option, as you can sometimes find friends or acquaintances who are looking for a place to live for a while. Otherwise, your options include online listing sites.

When marketing the room, make sure people understand the situation upfront. Clearly explain that they’ll be renting a private room in an occupied home. You don’t want to mislead prospective tenants or waste their time.

Conducting Research and Due Diligence

After gathering a couple of offers, you should research the prospective tenants, and do your due diligence. This may involve running a background check, asking for references, running a credit check (the Equifax Identity Report is a cheap and comprehensive option), and asking all of the standard questions a normal landlord would.

While a phone interview may be okay for the first round of applications, never extend a formal offer without meeting the individual in person. This allows you to get comfortable with them and make sure they are who they say they are.

Setting Rules and Signing Documentation

Before letting the tenant sign the lease, it’s important to set some boundaries and house rules. Make sure they understand that this is your private residence, and you have expectations for how they act while on the premises. Things to discuss include how utilities will be split, how many guests are allowed over (and when), which maintenance tasks are their responsibility, and whether pets are allowed.

Once everything has been discussed, have a lawyer draw up a lease agreement with all rules and requirements in writing. This will help you stay legally protected, should issues arise.

Dealing with Potential Issues

However, just because you have a written lease agreement, it doesn’t mean issues won’t surface. Any time you live in close proximity to someone you don’t know, there are bound to be issues. Typical ones include overusing utilities, being too loud, not keeping the property clean, coming and going at random hours, and failing to respect your privacy.

When these issues come about, remind the tenant of the lease agreement, and kindly ask them to stop whatever it is they’re doing. If they continue to break the rules, you may be able to speak with an attorney and work through various legal options.

Ending a Lease
Houston Landlord and tenant fighting over rental property

When it comes time to end a lease, make sure you conduct a thorough and complete inspection of the room, and check to make sure everything has been moved out and cleaned up. If your tenant was cooperative, and you’re parting on favorable terms, ask them to send you references for future tenants.

In the end, you may find that being a landlord isn’t all that bad. In fact, you may decide that you’re interested in buying and renting other properties as a form of supplemental income. If so, you can always speak with us about your interest, and we can direct you to the appropriate resources.

Green Residential: Houston Property Management

At Green Residential, we treat our clients like family. We’ve been in the property management business for more than 30 years, and we take pride in offering Houston landlords top-quality property management services. Whether you’re looking for someone to carefully handle an entire portfolio of properties, or you simply need someone to keep an eye on a single apartment, we can help. For additional information, please contact us today!

Michael Brown

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