Experiences with renting out a room in your house?

[MrMoneySaver]

So I went under contract on a house today. It's more than I wanted to pay, but is in a nice area with nice schools and I love the house. It has a basement bedroom, and the basement also has a bathroom. The basement has a separate entrance. Seems like I could make some income by turning that into either an Airbnb or just finding a tenant.

Have you done anything like this? Would you recommend it?

[Rdy2Fire]

So I went under contract on a house today. It's more than I wanted to pay, but is in a nice area with nice schools and I love the house. It has a basement bedroom, and the basement also has a bathroom. The basement has a separate entrance. Seems like I could make some income by turning that into either an Airbnb or just finding a tenant.

Have you done anything like this? Would you recommend it?

I bought a similar house years ago, it was more then I wanted to spend, since then my taxes have nearly doubled but it was also more space then I need. Since I didn't need the space so the downstairs became an apartment, which is legal where I am (that could be an issue for you, do some research).

Since I didn't need the space and I thought I could use the $ I rented it. I knew I could afford the house without it but having a house was a new thing with new expenses so it was a nice cushion. After the 1st year I pretended like I never received the rent, put it right to principle on my house and paid it off in under 10 yrs. With all that said, the key is finding a good tenant, I had 2 that WERE NOT GOOD.

As for the AirBnb that wasn't an option then I have friends that did that and made some good $ to help with their kids college expenses but they ended up stopping after a few years because they didn't like the idea of new people at their house all the time.

[Metalcat]

First, research all of the laws in your area on this.

Second, if you rent it out, will your tenant have access to your kitchen and other shared spaces since there's no kitchen in the basement? Because that's more of a roommate than a tenant.

Are you prepared to live *with* someone?

[YttriumNitrate]

My old house was similar where there was a basement bedroom, bathroom, and its own separate entrance. There was also a tiny kitchen (basically just a refrigerator, an electric range/oven combo, and a sink) so the tenant never had to come upstairs. If there's space for it, and no regulations stopping you, I'd suggest adding a little kitchen in the basement if you can. A sink, a 40 amp circuit, and some inexpensive used appliances is just about all you need.

I just rented it to friends and overall the experience was fairly positive, and a good introduction to being a landlord.

[Rdy2Fire]

My old house was similar where there was a basement bedroom, bathroom, and its own separate entrance. There was also a tiny kitchen (basically just a refrigerator, an electric range/oven combo, and a sink) so the tenant never had to come upstairs. If there's space for it, and no regulations stopping you, I'd suggest adding a little kitchen in the basement if you can. A sink, a 40 amp circuit, and some inexpensive used appliances is just about all you need.

I just rented it to friends and overall the experience was fairly positive, and a good introduction to being a landlord.

Yeah I should have added that bit to my response on adding a refrigerator and small appliances/kitchen. I would not want to share my living space, in my new place, or in general, as Malcat mentioned. Unless of course it's a good friends and/or someone you've already lived with and just shifting the roommate location from where you are to your new home

[Metalcat]

Thay brings me back to checking the laws in your area.
How much kitchen is legally required to rent it out as an apartment. If not, can you legally rent it out without access to your kitchen. If it is legal, how illegal? As in, is it something a lot of people in your area do because the law has no teeth? Etc, etc.

First things first, always figure out the applicable laws.

[mozar]

Research laws that apply to you for getting a bad tenant to leave. In my state you have to mail a certified letter giving them 30 days notice. I recommend hanging out in the landlord forum on mmm to see what people are dealing with.

[ixtap]

We rent out one suite in our two bedroom (both suites) townhouse. We had her sign a month to month in case it didn't work out, but that was in 2018. Somehow this woman takes up more space than the two of us put together (she has more than half the kitchen storage, half the laundry shelves, the whole linen closet, and the bedroom with a larger bathroom vanity and two closets and still needs to store her vacuum in the coat closet with ours), but she is quiet and pays her rent on time. There have been a few kitchen issues, but they are actually communication issues that could be dealt with if they got to be too much, but frankly my husband is often as much at fault as she is.

[Catbert]

My sister rents out her basement apartment in the suburbs since she got divorced several years ago.  It has a tiny kitchenette with full sized refrigerator.  There's a separate entrance and the door at the top of the stairs is locked. 

She's had a succession of tenants - mostly newly married couples (strict Christians for some reason) and young men.  One recent college grad with a good job saved 100K+ over 18 months and moved to a cheaper state and bought a house.  Who knows, he may be on this board. Most tenants lived there only a year or so since a basement apartment with oddly configured space was stepping stone for them.

The only problem tenant she had was a middle-aged woman who complained a lot, paid late, then  stopped paying and had to be evicted.  The lesson here is that a less than ideal apartment in a good neighborhood is viewed as a rung in the ladder for young people starting their working life.  Someone middle-aged who needs to live in the same apartment doesn't see the same bright future.

[Dee_the_third]

Try it. As others have mentioned, the best $ return is probably renting it out as an apartment.

The key is a good tenant. I suggest making it as formal as possible - meet them as if you're a landlord who owns many properties (i.e. come from the store or something so it doesn't make it look like you live there, fumble with a key ring, don't take your shoes off). Have them submit a full rental application, including income and credit report - I use cozy.co, and it works pretty well. Set rent up with late fees built in, and don't be afraid to evict them if they're not working out.

What you DON'T want to do is get yourself into a verbal handshake agreement with a person who seems nice but then trashes the place/refuses to pay rent. It's your house, you need to feel safe there.

[Metalcat]

Try it. As others have mentioned, the best $ return is probably renting it out as an apartment.

The key is a good tenant. I suggest making it as formal as possible - meet them as if you're a landlord who owns many properties (i.e. come from the store or something so it doesn't make it look like you live there, fumble with a key ring, don't take your shoes off). Have them submit a full rental application, including income and credit report - I use cozy.co, and it works pretty well. Set rent up with late fees built in, and don't be afraid to evict them if they're not working out.

What you DON'T want to do is get yourself into a verbal handshake agreement with a person who seems nice but then trashes the place/refuses to pay rent. It's your house, you need to feel safe there.

Where I live, there is much better money to be made with AirBnB than renting as an apartment. However, there's a lot more work involved, and the laws here are quite strict.

It's also not just a matter of having a contract vs a handshake deal. Different areas have EXTREMELY tenant favoured laws where it doesn't matter what is in the contract, it can be literally impossible to evict people. Where my parents live, you cannot evict someone in winter, period, and winter is half the year. That's why my first statement to anyone considering landlording is to check their local laws.

[neophyte]

I bought my house 4 years ago. Since then I've usually had 2-3 roommates mostly or completely covering the mortgage. Overall It's been a very good experience. I'm all for it.

[ixtap]

Try it. As others have mentioned, the best $ return is probably renting it out as an apartment.

The key is a good tenant. I suggest making it as formal as possible - meet them as if you're a landlord who owns many properties (i.e. come from the store or something so it doesn't make it look like you live there, fumble with a key ring, don't take your shoes off). Have them submit a full rental application, including income and credit report - I use cozy.co, and it works pretty well. Set rent up with late fees built in, and don't be afraid to evict them if they're not working out.

What you DON'T want to do is get yourself into a verbal handshake agreement with a person who seems nice but then trashes the place/refuses to pay rent. It's your house, you need to feel safe there.

Where I live, there is much better money to be made with AirBnB than renting as an apartment. However, there's a lot more work involved, and the laws here are quite strict.

It's also not just a matter of having a contract vs a handshake deal. Different areas have EXTREMELY tenant favoured laws where it doesn't matter what is in the contract, it can be literally impossible to evict people. Where my parents live, you cannot evict someone in winter, period, and winter is half the year. That's why my first statement to anyone considering landlording is to check their local laws.

While you will have to check the landlord side of things for details, start with the local tenant's association, if there is one. A read through of their site will usually give you a good idea of who the laws and courts favor locally. The last time I had a problem landlord, the tenant's association said about most things "Really your only option is to take them to small claims, and the judge is likely to side with the landlord in any marginal case."

[Metalcat]

Try it. As others have mentioned, the best $ return is probably renting it out as an apartment.

The key is a good tenant. I suggest making it as formal as possible - meet them as if you're a landlord who owns many properties (i.e. come from the store or something so it doesn't make it look like you live there, fumble with a key ring, don't take your shoes off). Have them submit a full rental application, including income and credit report - I use cozy.co, and it works pretty well. Set rent up with late fees built in, and don't be afraid to evict them if they're not working out.

What you DON'T want to do is get yourself into a verbal handshake agreement with a person who seems nice but then trashes the place/refuses to pay rent. It's your house, you need to feel safe there.

Where I live, there is much better money to be made with AirBnB than renting as an apartment. However, there's a lot more work involved, and the laws here are quite strict.

It's also not just a matter of having a contract vs a handshake deal. Different areas have EXTREMELY tenant favoured laws where it doesn't matter what is in the contract, it can be literally impossible to evict people. Where my parents live, you cannot evict someone in winter, period, and winter is half the year. That's why my first statement to anyone considering landlording is to check their local laws.

While you will have to check the landlord side of things for details, start with the local tenant's association, if there is one. A read through of their site will usually give you a good idea of who the laws and courts favor locally. The last time I had a problem landlord, the tenant's association said about most things "Really your only option is to take them to small claims, and the judge is likely to side with the landlord in any marginal case."

Yes, exactly. Don't just look into the basic legality of evicting someone, talk to the tribunal or a real estate lawyer who has experience with evictions. Basically, anyone who can give you a good sense of how the rules skew in your area.  Some places are very pro landlord and some are pro tenant.