Author Topic: Renting out rooms: taking in lodgers / housemates / tenants / subletters  (Read 929 times)

sea_saw

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I recently bought a two bedroom flat, with the intention of sharing it with a housemate. It's my way of being able to afford to live here (HCOL area for housing) as a single person with a median salary.

My first tenant is moving in on Monday. I'm feeling hopeful about this working, she's a friend of a friend, seems like we'll get on, and she's been prompt and efficient in correspondence.

Stories, experiences, warnings and tips are all welcome!  I have spent plenty of time on the other side of this dynamic, and in shared houses where we were all on the lease, but this is a first for me.

Advice I've been given by my previous housemates/landlords:
  • Include all bills in the rent payment to keep admin low.
  • Get everything in writing - it doesn't have to be a formal legal-looking document or printed on paper, email works.
  • Get a dishwasher, provide only dishwasher-safe kitchenware, and accept that a slightly shorter lifespan for some items is worth never having to get annoyed about dishes
  • Likewise with cleaning, don't even consider arguing about it, if it doesn't work our relatively naturally accept that a cleaner is a better solution than living with conflict or mess
  • If a lodger's room is nice and has everything they need they will probably keep themselves to themselves more often than not
  • UK specific: under the rent-a-room scheme, if your rental income is under £7500 for the financial year, it is tax free and there isn't even any paperwork. The UK government documentation on renting is also surprisingly readable and helpful. https://www.gov.uk/rent-room-in-your-home

PS There seems to be a thread called 'live in landlords' but they're all about connected but separate units, which isn't quite the same thing... but might be of interest to someone else https://forum.mrmoneymustache.com/real-estate-and-landlording/live-in-landlords-unite!/
« Last Edit: November 24, 2017, 09:30:43 AM by sea_saw »

jooniFLORisploo

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #1 on: November 24, 2017, 09:33:35 AM »
Know the laws that apply. Read them in advance.

The above will likely dictate under which circumstance you are and are not actually a landlord, which sets of laws apply, etc. For example, where I live, you're a landlord if renting out a self-contained unit. Landlord/tenant rights and responsibilities apply. But if you're renting a room, no. And then there are some in-between situations that have different laws again.
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Rubic

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #2 on: November 24, 2017, 01:04:10 PM »
I have done this in the US as both a renter and a tenant.  Number
one advice is to have a proper lease and put everything in writing.

My experiences have been positive. I selected foreign graduate
students as tenants, so they had a high incentive not to get into
trouble.

bookguy

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #3 on: November 24, 2017, 02:58:17 PM »
Following, because I'm recently single (after 30 years of marriage) and living in a 14 room Victorian house. Right now my daughter and grandson live with me, but I'm expecting them to move out sometime next year, and I would like to rent out the rooms upstairs (1 bathroom that would be shared by 4 bedrooms, one catch-all room, one "living" room) so I'd like to know some tips on what to look for, as well. I'm just in the very beginning of thinking about this: I live in a small village close to two large Illinois cities with access to major highways and a few colleges/universities not far away.  I was considering renting out room to college students, but wondering about any issues. Thanks.

Step37

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #4 on: November 24, 2017, 08:54:58 PM »
Following, because I'm recently single (after 30 years of marriage) and living in a 14 room Victorian house. Right now my daughter and grandson live with me, but I'm expecting them to move out sometime next year, and I would like to rent out the rooms upstairs (1 bathroom that would be shared by 4 bedrooms, one catch-all room, one "living" room) so I'd like to know some tips on what to look for, as well. I'm just in the very beginning of thinking about this: I live in a small village close to two large Illinois cities with access to major highways and a few colleges/universities not far away.  I was considering renting out room to college students, but wondering about any issues. Thanks.

This is likely more applicable to you than the OP. My husband and I rented out rooms to university-aged students over a period of several years through a home stay program in our city. We provided room and food, but there were room-only options as well if you didn’t want to be responsible for their meals. This was mostly a very positive experience, as we got to meet many interesting students from China, Japan, Korea, and even a couple from Canada. We still keep in touch with several of them, more than ten years later.

If a similar program exists in your area, it might be a good way to get into renting rooms. Most programs will have some sort of standard agreement rules/expectations so students (and hosts) know what they’re getting into. There would also be someone neutral to mediate differences (or remove the student) if an issue arose.

I think it’s a worthwhile way to offset some bills from your big house. I agree with what others have said about being clear about expectations (in writing) from the outset.
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Freedomin5

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #5 on: November 24, 2017, 08:58:41 PM »
I've had multiple housemates over the years. In addition to what you've already listed, what has worked for me is:

- Setting general house rules, for example:
    - Dishes should be washed within 24 hours (we had no dishwasher and so had to wash our own dishes)
    - If you're using the last available bowl/plate/utensil, wash it and place it on the drying rack. This is just common courtesy.
    - Cleaning: each person is responsible for their own room. Common areas are cleaned once per week
    - If the trash can is full, take out the garbage and place it in the bin. Don't let trash overflow onto the floor.
    - Your policy on drugs/smoking.
    - Parties and small gatherings of friends. I'm very introverted, so my rule was that this was a "quiet house" and if you invited someone over, it was fine if they hung out in their bedroom, but not in the common areas (obviously, I followed the same rule and didn't have my friends over) since that would make it awkward for the other housemate. Again, work with what makes you comfortable.

It also helps to let your housemate know your general schedule. For example, I told every housemate that I'm pretty busy and am generally out of the house by 6:00 AM, returning around 9:30 PM Mondays to Fridays. This way, the housemate won't think I'm avoiding them and feel hurt/offended, and won't expect me to have dinner with them or chill out on the couch with them.

I explained these house rules/expectations to prospective housemates before they agreed to move in. I only had one housemate who agreed to the terms, then later got mad because I  was upset that she invited friends over. It was quite handy to be able to say, "I told you right from the beginning that these were the house rules. You knew what the expectations were. If you didn't agree to them at the time, you didn't have to agree to move in."

Shane

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #6 on: November 25, 2017, 06:06:09 AM »
TheGrimSqueaker's blog about being a live in landlord has lots of excellent advice:

http://theliveinlandlord.com/

Imma

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #7 on: November 25, 2017, 11:18:31 AM »
We rented out one bedroom (of three) to a good friend for a year. While we were happy to have someone pay the bills and we had lived with him earlier a few years before that, it was still hard to adapt sometimes. Because our house is quite small (standard 1940s terraced home on a housing estate) we had to share our living space as well. At some point, both our roommate and me ended up temporarily unemployed. Because we have very different characters and background - us from a solid working class background with a self-starting attitude, while he grew up in an upper middle class household but wasn't aware of the silver spoon in his mouth - him and me being home together a lot and needing to share our space was sometimes hard. For example, he looked down very much on frugality.

I think it's important to set ground rules for all the shared spaces. Put things that are private or fragile in your own rooms and not in your shared spaces. If you are drying on a laundry rack, decide in advance where to put that. This might sound silly, until you come home with a few friends in tow and find out your roommate is drying his boxers in your shared living room.

Talk about what you expect your roommate to do himself or have him pay for in terms of room furnishing and decoration, and what will be provided. Our roommate preferred a different type of curtains that we didn't want to buy at that point. We'd just bought the house and fixed it up on the cheap. We wanted to add to our emergency fund first, before buying luxury stuff. He thought we were just cheap. He also wanted to have a/c in the summer, which we don't have. We did allow him buy his own though.

We painted the room before he moved in, but didn't ask him to paint it again when he moved out. Looking back, we should have. We had a look around the room when it was still furnished and it seemed allright. We forgot to have a look around the place after he'd moved his stuff out but before he handed in his key. It seems he had spilled an entire cup of coffee behind his desk on the white wall....

Tobias

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #8 on: November 26, 2017, 09:09:28 AM »
My boyfriend (now husband) and I bought a 4 bedroom, 3 bathroom house in Seattle in 2010, and paid the mortgage by having three roommates.  We started phasing the roommates out when I finished graduate school, and we are down to one roommate now, in a suite in our basement.  We have also rented a room on AirBnB.  We'll probably always have one roommate or list one room on AirBnB, depending on whether we value convenience or profit.  My husband and I have a kid now, so we value having a low-maintenance roommate/tenant in the basement who keeps to herself.

You're getting great advice on this thread.  What worked for us, having about 12 housemates come and go over a 5-year period:

A month-to-month agreement: if someone wasn't a good fit, we could ask them to leave.  Likewise, we had a lot of people stay less than a year. Tenants have fewer rights in Seattle if they live in a shared space with the landlord, so we never had any issues with attempted squatters or unpaid rent.

Splitting the utilities bill 5 ways to discourage wasting water/heat.

Charged first months rent, last months rent, and a deposit to move in.  The last month's rent gave us a cushion to find another housemate if someone left suddenly.  We'd refund this if we found a new tenant quickly.

We didn't have a lease, but a Google doc with our expectations. I don't know if I'd do this again, but it worked well for us at the time.

Have really clear boundaries, including emotional boundaries.  Some housemates are looking for a mommy, and I had to set really clear boundaries that it wasn't going to be me.

What I'd do differently:

Charge more.  We decided our rent amount by dividing the mortgage/taxes/insurance by five, and that came out to slightly below market rate.  I've learned that charging more tends to attract more stable people.  This has proven true with my AirBnB side gig too.

Hire a housekeeper and charge the tenants.  Despite clear written expectations new tenants agreed to, various house meetings, chore charts, and public shaming, some housemates would not pick up after themselves.  Because I cared more about the property than renters, I ended up being the defacto maid. 

Interestingly, friends and acquaintances did not really make better or worse housemates than the people we found on Craigslist.  Out of 12 housemates, about 2 were really excellent, 2 were so terrible we asked them to move out, and the rest were adequate.  There were friends and Craigslist people in all of those categories. 

adamcollin

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #9 on: November 27, 2017, 12:41:00 AM »
TheGrimSqueaker's blog about being a live in landlord has lots of excellent advice:

http://theliveinlandlord.com/

Good blog post, thanks for sharing.
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sea_saw

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #10 on: November 27, 2017, 07:53:07 AM »
As always, TheGrimSqueaker's writings are smart and fun :)

I've also done a google document with expectations about private vs shared spaces, cleaning, dishes, central heating, etc. It was a useful exercise for me to get it all written down and sounding authoritative, and new tenant has also said she appreciated it, as did I when I was in her shoes in my last place - so I really would strongly recommend it I think. 

I'm not doing a formal lease document/rental contract, but that's because I'm not doing anything to modify the standard UK agreement for renting out a room within a landlord's home (https://www.gov.uk/rent-room-in-your-home). If I was, I would definitely want it signed. As it is, I've just got an email chain with her agreeing on the rent amount, when the rental period begins, and when rent is due.

I looked into hosting foreign students through a programme, but they wanted a bit more handholding than I'm up for. My daily routine is all over the place and I'm sometimes only home to sleep, so I need a tenant who is self-sufficient. That said most of the people I've lived with before have been grad students, academics, researchers, university support staff etc and I think that's probably still my niche (would be a bit of a problem if not as that describes much of this town, including myself and my friends!).

The biggest thing that's resonated with me in this thread is the regret about not charging more. I'm giving this first person a slightly under market rate, for a combination of factors, some more sensible than others. I can see that benevolent glow start to fade into resentment if sharing becomes proper hard work. I may well charge the next tenant more.

She's moving in this evening – here's hoping!

Shane

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #11 on: November 28, 2017, 12:56:55 AM »
Sounds like you know what you're doing, sea_saw. Good luck!

Layla

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #12 on: November 28, 2017, 02:25:15 AM »
We have three spare rooms and a spare bathroom down one end of our house which we have just started renting out to flatmates. We had no idea if anyone would come as the house is in the country, 10km from nearest town.

But so far we have two people living with us. They are both new immigrants or visitors. Both keep to themselves and work a lot. It is great to have them paying rent, but I would probably like them around a bit more, as it makes me feel like they aren't comfortable with us if they just stay in their rooms all the time. They seem happy enough though. The only other minor negative is that sharing the fridge requires some piling up of things so we can keep to our two shelves. So all in all it is basically fairly painless passive income.

We did hire a cleaner and unless you love cleaning I would recommend that. There is probably some minor increase in gas, water and power bills but it isn't actually noticeable to me. We heated the whole house before anyway. The rent is all inclusive so no need to divide bills.

We do have a written contract which stipulates when and how to pay rent, and some basic rules like not having overnight guests.

Bicycle_B

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #13 on: November 29, 2017, 11:27:16 PM »
Have had renters in my house for years and years.  Despite a month to month lease, frequently have individuals stay for years on end. 

You've noticed that different people in this thread have different desires and expectations for their roommates.  All suggest being clear about your expectations.  I support that strongly.  Consider interviewing with those questions in mind - ask both open and closed questions that allow people to state what they're like in those areas.  Since you're sharing contiguous living space, not just dividing a structure into separate apartments, you can and should seek to select renters whose nature will fit your expectations.  Then, as the other posters said, state your expectations clearly and have at least a minimum part of them in writing. 

For fun, my story is that someone once said I reminded them a little of Jim Parsons Sheldon in Big Bang Theory.  They were referring to a work context, not a rental one, but I joke/not joked "I do have a roommate agreement..."

https://www.youtube.com/watch?v=XIm6_2NzIc4

https://www.youtube.com/watch?v=RVtlx1JCSg8
« Last Edit: November 29, 2017, 11:29:40 PM by Bicycle_B »

sea_saw

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #14 on: December 04, 2017, 07:27:40 AM »
So far so good! We've been getting on very well, I actively enjoy having her around. We're both busy people with multiple jobs and active social lives so haven't spent much extended time together, but we've successfully managed both friendly interactive hanging out talking about life/hobbies/food/etc (it just happened - hooray we get on) and relaxing in the living room doing unrelated things at the same time without interacting (whew).

She's clearly a bit cleaner and tidier than I am - that or it's just because she's somewhere new and wants to impress, but from her quick competence at it I get the impression it's the former. I've been encouraging this by upping my game too, so the flat has been looking consistently better than when I was there alone. She's been very cautious about not imposing on my space and things, and I've been the one encouraging her to actually leave stuff on her bathroom shelf if she wants, use whatever crockery she needs etc - which definitely falls under the category of Good Problems.

I honestly think I got super lucky, considering I didn't do such a formal/in depth interview process as I often see recommended. 

Hopefully I have not shot myself in the foot by this relieved post, only to find that she doesn't pay up next month or something :P

Also, another friend got in touch saying they knew someone they thought I'd get on with who was looking for a place starting from Jan/Feb next year. Which is coincidentally when current person wants to move out. I'm so pleased, whether or not that particular arrangement works out it's so hopeful-making to have these leads offered to me. I can see how my former landlords both never advertised and never had the room empty for more than a few weeks.

Shane

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Re: Renting out rooms: taking in lodgers / housemates / tenants / subletters
« Reply #15 on: December 05, 2017, 12:00:09 PM »
Congratulations on your success, so far, see_saw!