Increase Your Income and Build Relationships By Renting Out Part of Your Home

renters

Guest post from Lisa Joy of Eclectic

A few years ago, we moved from a tiny condo into a split-level home. We loved our new floor plan and knew we could expand to fill it — but we didn’t have to. We had an extra bedroom, bathroom, and kitchen downstairs; and since we didn’t want to waste that space, finding a renter seemed like the logical thing to do.

For the record, you don’t need an extra kitchen to have a renter. My parents, who are entering the empty-nest stage, have invited a local college girl to live in a spare bedroom upstairs. They have also remodeled part of their walk-out basement to be a small apartment.

Having a renter in your home can expand your family’s relationships while increasing your monthly income. Also, income earned from a renter has the added benefits of often being tax-free (you’ll want to research this as you do your taxes), and requires no continual work hours.

If you live in a home with a little extra space, or if you could consolidate to make that space, having a renter may be a good option for you as well. Here are a few things to think about if this is a path you would like to pursue:

Find the Right Fit

A renter can be a nightmare if it’s not a good fit for your family, but a good fit can be a huge blessing. We are just about to welcome our third renter into our home. All three have been single, Christian women who have just completed their undergrad degree.

To find them, we advertised through two local colleges. We make it clear that we are a small Christian family with young children. We will only accept females who are willing to keep quiet hours and respect our property.

We ask each prospective renter for three references, and we do a background check. We also ask them to come visit our home and share a meal with us, so that they can see the place and so that we can get a feel for their personality.

Set Clear Boundaries

I’m a private, introverted person, and having a renter only works because we have clear boundaries. Both we and our renters sign a lease agreement before they move in.

The lease agreement includes specification of what space belongs to whom. Some space belongs to us, and the renter is not allowed to enter without invitation.

Some space belongs to our renter, and we are not allowed to enter except in case of emergency. Some space is shared.

Because we have a split-level home, the entire upstairs is our private space, so I can wear my pajamas around without having to worry. Not like I would, you know, but just in case! ;)

We ask our renters to get a post office box, so we’re not sharing a mailbox. We also specify where our renter should park their car.

If you share a kitchen or bathroom, you can specify things like which cupboard or fridge/freezer shelf belongs to your renters. You can specify when your renter does laundry. We also make rules about the number of guests allowed, and ask our renters to get permission for overnight guests.

Our lease agreement includes basics like a security deposit to cover any damages, and a deadline when rent is due each month. And because we have small children, we set quiet hours from 8 p.m. to 8 a.m.

Clear boundaries upfront protect both you and your renter, and help you find someone with a quiet lifestyle who will respect your privacy.

Enjoy A Mutual Blessing

I remember being a single woman just out of college, and it was challenging. Finding housing that is both affordable and safe can be difficult. Adjusting to a new area can be lonely.

Many single women welcome the opportunity to live with a family. In some cases, you may find that you are not just a landlord, but a friend.

A renter can also be a blessing to YOU. We hire our renter not only for baby-sitting, but also for getting mail and watering plants when we are out of town.

We occasionally invite our renter up for a meal and last winter we visited together when we were snowed in. Our children consider them almost like adopted aunts.

I had some initial misgivings, and of course there’s been a little inconvenience, but ultimately having a renter has been so worth it. I’m grateful for the opportunity to increase our monthly income, and to reach out at the same time.

Lisa Joy is a disciple of Christ, living in the Shenandoah Valley with her husband, son, and daughter, teaching part-time, fostering, homemaking, and blogging a little around the edges at Eclectic.

photo source

Share This:

Subscribe for free email updates from Money Saving Mom® and get my Guide to Freezer Cooking for free!

Read Newer Post
«
Read Older Post
»

Comments

  1. Jen says

    This seems like a great way to make some side income if you find someone who is a good fit. How did you figure out how much to charge? Do you have to be zoned in a certain way to do this?

    • says

      Yes, there are different zoning regulations by state. Also, for clarification, in most states you do not have to have a kitchen for a border, but in every state you will have to have a kitchen, bathroom, parking, and an allotted amount of square footage, for each renter, per the federal housing act. You will also need to be zoned and have a permit from your local counties office; many counties will require an on-site visit to receive this permit as well. Also, things to note are that you should look into this act and your state laws to make sure you follow laws such as having a separate bank account for rent and security deposits, many states have a limit on how much you can charge for background checks/application fees, as well as to protect yourself, your family, and property by familiarizing yourself with Federal Tenant Anti-Discrimination Laws during the application process, and if needed, proper state law statutes concerning tenancy and eviction, should it come to that; there are also limits to how you can legally word leases, how much you can charge for fees, such as end-of-lease carpet and rental fees, lock-out services, utilities, etc. My mother managed an apartment complex and several duplexes, as her secondary job, on behalf of her friend, a developer (this was my first job helping her in the rental office), and there are a lot of laws and regulations that are skimmed over in this article! While this is a good means to make an income as a border, you should consider all of the hidden fees of actually renting out properties, if going that route!

  2. says

    Make sure to check your city laws. We have to have an inspection every two years and be up to code on all electrical. It got expensive one year when they changed the city laws and almost all of our plugs were no longer up to code. We also have to have an egress window if they stay in the basement. Just a few things to think about. In our case, we had to be sure it was a long term commitment so it paid for the upgrades and such.

  3. Roxanne says

    Rents received is always taxable income on your federal return. You can offset this income with allowable expenses, but you cannot neglect to report this income.

    • Lisa says

      Yes, that’s what I was going to mention, too. You must report all income on your federal return.

    • Sarah says

      Rent is absolutely taxable income!!! We stopped renting out our home when the income pushed us into a higher tax bracket.

  4. Lauren says

    Another great way to have extra income with extra space in your home is having an exchange student. In our area there are many opportunities at many different schools to host an exchange student. Great opportunity to learn a new culture for the school year too.

  5. Christine says

    proceed with extreme caution when sharing you’re home if you have kids. having female tenant doesn’t ensure your kids aren’t at risk from them or their friends/boyfriends. unfortunately, a family at my church learned this the hard way, wasn’t tenant but her boyfriend who was the threat. the extra money is never worth putting family at risk for, no amount of referrals, background checks are a guarantee.