Savvy Income Sources: Room For Rent

I’ve been slowly covering creative ways people can generate income from their property. We’ve talked about using your home as a Vacation Rental and about Vacation Swaps. Now we’ll focus on one way to make money once you get home from vacation: renting out a spare room. The concept of the boarding house has been around since early Nineteenth Century America. Historians estimate that between a third and a half of urban dwellers either lived in a boarding house or took in boarders themselves. The arrangement provided mutual benefit; workers could find inexpensive lodging close to their jobs, and landlords (more often landladies) had a way to earn money without having to seek employment outside the home.

Many Nineteenth Century farms in upstate New York took in boarders over the summer; this Catskills farm played host to families enjoying a break from city life.

Even back then, the idea of taking in boarders was surrounded with stigma. Landladies often didn’t advertise, for fear of being associated with the heartless marketplace. Yet clearly, lots of people opened their home to boarders. Today, the stigma continues, though in certain areas it’s lessening.

When I suggested on Get Rich Slowly that people consider renting out a spare bedroom to either a roommate or vacation traveler, the response from readers was very passionate, and divided . Some were in vehement support of the idea, and offered testimonials about how well it’s worked for them. Many other readers were horrified, as though I’d suggested they send their children to work in the coal mines or something.

People still find it unsavory to open their homes to other people (and income)–even today, when so many people are under financial pressure, often related to home ownership. I can’t change people’s mindsets, but I can help people who are open to giving it a try. If you have a spare bedroom, a finished basement, or a room over the garage, think about whether someone may be happy to live there. Don’t assume the worst right off the bat–assume you find a quiet, responsible person to live there. Does that sound appealing to you? If so, here are some tips to get you started:

• The best rooms to rent out are somewhat secluded from the rest of the house – that way everyone gets a bit more privacy
• You can rent out your room long-term, or just for a week here and there. This depends on your location (is it desirable to tourists and other short-term travelers?) and your openness to having someone else in your home.
• Put effort into the way you present your home in your ads. As I suggested in my Vacation Rental article, showing care and consideration in your ad will communicate to potential renters that you put care into your home.
• Have faith in humanity (but always get a deposit). Opening your home requires opening your heart and mind. If you don’t intrinsically trust people, then this is not for you. If you bring negative energy into this relationship, it will attract negative energy.
• Get a deposit that’s large enough to cover a “worst case” scenario. My rule of thumb is one month’s rent, but if your home is very luxurious, it’s fine to ask for a larger deposit.
• Screen candidates carefully. Find out people’s financial situation to ensure they can easily pay the rent. If it’s a struggle for them to afford the rent, you’ll have issues down the road. Trust your gut here – if there are any warning bells going off in your mind, this isn’t the tenant for you.

As for resources to find tenants, I’ve been a fan of AirBnB, a site that allows people to monetize space of any type–from air mattresses to deluxe condos. Craigslist can be good as well, though be sure to do a thorough email and phone screening before inviting anyone into your home. If you are attracting sketchy people, carefully assess the messages your ad is sending. Sketchy people aren’t interested in clean, beautiful, loving spaces.

You could also consider renting your room to college students or medical interns. I tend to avoid these groups, as people who don’t have a steady income and/or whose parents are supporting them sometimes have a hard time understanding the value of money.

My ideal tenant is a non-smoking, pet-allergic college professor who is excruciatingly clean, in a long-distance relationship (so no sleepovers) and who spends most of their time out of the house. But that’s me.

Have you ever rented out space to someone?

Photo source: NY Folklore