If you’ve ever been pressed for cash, you may have considered the option of taking on a roommate. Depending on your area and your home, this can raise a substantial amount of extra money every month, often helping to subsidize a mortgage payment that may otherwise be difficult to make. Often, the decision to rent out space in your own home is made after a breakup or financial crisis. The results are not always ideal.
First, you’re always an on-call landlord. Even if you’re away on a vacation, your tenant may need something. It is your house, so you are on-call. Your new roommate knows your schedule, so there’s no excuse making.
You’re also going to hear your tenant around every corner. Renting a room or a basement to someone means that you’re sharing your home, so music, talking, movies add some noise. You’re responsible for being sensitive to their needs too—which means mutual quiet time, even if that isn’t your style.
Shared space probably means sorting a few things out. Is there mutual space that will need to be cleaned? Who is responsible? How will utilities be divided up? Who is responsible for paying them? In order to feel comfortable sharing your space, you’ll need to be careful in selecting tenants you absolutely trust. You may also need to think about fire code as it relates to locked doors, especially in basement rental spaces. There may be rules you need to follow to make your home a rental space.
You’ll also need to think about parking setup in your home. If you’ve got a one car garage, there has to be somewhere for your renter to park. You may need to build some sort of covered parking, pay for a street permit, or allow for some space in the driveway to accommodate your new tenant. This may mean giving up your nice parking or space.
Finally, know that you are likely responsible for repairs and upgrades that your renter expects. If you live alone, you may choose not to replace a microwave because you rarely use it. When you have a renter, their needs, expectations, and conditions of the lease must also be met.
The good news is that you can have all of the benefits of a renter with few of the downsides. By purchasing income property like Jason Hartman, you’re able to earn extra money without sharing your space. And even better—it’s more money, more tax breaks, more financial security for you. (photo credit: Mónica, M via photopin cc)