5 things to consider when you rent out a room in your home

Renting a room to a tenant isn’t for everyone — let’s get that straight off the bat. But, for some, it can be a convenient and enjoyable way to make an additional bit of income.

If you’re reading this, you’re probably considering renting out a room in your home. But, understandably, you’ve got questions, concerns and, possibly, pre-conceived ideas about what it’ll be like.

Undoubtedly, there’s a fair bit to consider. Would you know the difference between malicious damage and deliberate damage, for example? And what about your mortgage lender — do they need to know?

For starters, here are five of the most important things to take into consideration before you decide to rent out a room in your house. It’s time to do some homework!

1. You might experience high tenant turnover

Tenants come and go. Sometimes, they come and go very frequently indeed.

This is, unfortunately, a facet of renting out a spare room. While it does sometimes happen, you’re unlikely to find a tenant who stays for a very long period of time. Most people view renting a room in someone else’s home as a stop-gap, and such people are usually either young or single (or both), which means they’ll have greater plans for their future.

Providing you are conscious of this fact, it won’t be an issue, but just bear in mind that you’re likely to go through a number of tenants during your time as a landlord.

2. There are hidden expenses

The reason you’re renting out a room in your home is because you want to make some extra income. That’s cool, but it’s important to bear in mind that there are hidden expenses for which you’ll need to account if you want to make a decent return.

It varies according to each situation, but this could include heating expenses, appliance repairs, furniture costs, and utility bills. In fact, you may find that you have to pay for stuff like water, electricity and broadband, since it’s difficult to build these proportional costs into rental agreements (and it isn’t always legal to do so).

3. You’ll need to tell your mortgage lender

It’s important to tell your mortgage lender if you decide to start renting out a room in your home (unless you own it outright, of course!).

There most likely won’t be an issue with this at all, but it pays to err on the side of caution and be completely transparent about what you’re doing with your spare room.

You’ll probably find that you can just continue paying your mortgage as usual, but if there are penalties, additional charges or changes to your terms, take them fully into account before biting the bullet.

4. You need to get your head around malicious damage vs deliberate damage vs wear and tear

When you rent out one of your bedrooms to a stranger, there’s always the outside chance that malicious damage may occur. Thankfully, the chances are pretty remote, but it can happen.

This is why it’s important to distinguish between malicious damage and wear and tear. The latter will happen over time (which is why it’s a good idea to give the room a lick of paint in-between tenants), but when something is broken or defaced deliberately, it’s a different story.

To cover yourself, you’ll need an inventory which should be checked by both parties on the day the tenancy begins, as well as an ultra-clear contract which explains what potential damage the tenant might be liable for. And, if you ever discover something that bothers you, make sure you take it up with the tenant (calmly) as soon as you can.

5. You’re letting someone else into your home

Yes, this may be stating the obvious, but this is really the most important point to keep uppermost in your mind, especially since it means giving up some degree of privacy for most people.

If your home is big enough to reserve plenty of “out-of-bounds” personal space, that’s great, but if it’s a smaller property, you’ll have to accept that your time and space won’t always be your own when you’re sharing rooms such as the kitchen and/or the bathroom with a tenant.

Essentially, you’re inviting a stranger into your home (unless, of course, they’re a friend you’re helping out). You’ll therefore need to do your homework and work hard to ensure that any potential tenant will be a good fit for you and your situation.

The final word

Renting a room in your home is a big deal — make no mistake. But if you take into account each of the points above, you’ll be far better equipped to make this a successful endeavour.

Just remember that last point; you’re letting someone else into your home. So, if you value your privacy and personal space above all else, then this particular route to a bit of extra cash may not be for you.

However, if you enjoy having extra company around, you don’t mind a bit of inconvenience now and again, and you’re committed to setting clear ground rules from the outset, then it could be one of the best decisions you’ll ever make!