We have talked about renting out a bedroom, or a house, on Airbnb. But we haven’t really discussed renting out a spare bedroom in your house on a regular, permanent basis to make some extra money.
Does it work? Can you really make money renting out a spare room in your house?
Actually Money Renting Out A Spare Room In Your House
Renting out a spare room is a more stable alternative to most other share economy hustles. However, there are some pitfalls to be aware of.
Many people see this as a proven solution to money problems, or as a way to earn some easy cash. But the truth is that there are a lot of things to consider before making the leap to bringing in a roommate or a tenant.
So let’s talk about it.
How Much Can You Earn?
First, let’s talk about the good stuff.
How much money can you earn?
Depending on what part of the country you live in, you can charge anything from $200 a month to closer to $800 per month for a room, or sometimes even more. Of course, real estate and rental property in most of the Midwest is a lot cheaper than it is on the coasts, and rural small towns usually cost less to rent in than large cities do.
If you’re wondering what you can earn by renting a room out, take a look at Craigslist in your local area and see what other people are charging for room sharing. You can also ask around and see what people are paying for bedrooms in college houses and/or lofts.
The great thing about this side hustle idea is that you already have the room in place (at least, we are assuming so, since you are looking into the possibility of renting it out)… so barring the inconvenience of having someone living with you, it is pretty much free money.
Still, even beyond higher utility bills, there are some things to consider.
Are You Sure That You Want This Person Living With You?
Moving someone in with you to rent a spare bedroom is a pretty big thing. Depending on how your house is laid out, this person may now be sharing your living space. If you already know them, then this may not be as big of a deal… but it could still be quite an adjustment.
But if it is a stranger, make sure that you are 100% alright with whatever outcome this situation might have. You may annoy one another. This person may not clean up after themselves a lot. This person may end up getting on your nerves.
And probably most importantly… you cannot usually just kick someone out for no reason once they move in with you. Laws vary from state to state, but in a lot of states, tenants are protected for at least a certain number of days… meaning that it can be pretty tough to get your room back if things go really south.
But… you will also have someone paying you money every month for a place to live, which will help you to pay bills and make payments on your house or apartment. If you can live with the other things, this is the upside!
Finding The Right Person To Rent A Room To
This can actually be quite a challenge. In this type of situation, a lot of people tend to reserve extra bedrooms and other rentable living spaces for people who are either in their family or who are at least in their close social circles.
And the reasons for this are pretty apparent. Do you want some person you randomly met online to start living with you?
This may not bother some people… and if it doesn’t bother you, then it may not be an issue. But there are a lot of people who are bothered by it and would rather have someone familiar living in that room.
So you have to decide who you are going to consider as ‘eligible’ when you open up that room for rent. You may only want to tell close friends and family about it… or at least try to get a referral from someone you know or are related to so that you can at least be pretty sure that this other person is going to be a good candidate.
What About Legal Stuff?
Don’t forget to do some research about your local rental laws. Some states are more lenient about this than others… but you should always dot your T’s and cross your I’s when it comes time to take on another tenant.
You should probably hire a lawyer to draw up the paperwork for you.
If you fail to draft the appropriate legal paperwork, you may put yourself into a situation that could be expensive and complicated to get out of.
What if this person never moves out? What if they stop paying rent? What if they start damaging the property? What if they start taking part in illegal activities within the room?
Hopefully, you would never be in a situation like this… but it is always a good idea to keep your bases covered and to protect yourself.
People will do all kinds of crazy things! It is important to keep yourself legally covered in case things go off the rails!
What About Bathrooms And The Kitchen?
Will this person be sharing a bathroom? How about a kitchen? If so, then you might want to make sure there are enough bathrooms to go around. You may also want to draft rules for ‘common living areas.’ If your extra room does not have access to the main house, then you may not need to worry about it.
But if it does… then you may actually end up sharing A LOT more of the area than you previously imagined. Do you need the bathroom at a certain time every morning to get ready for work? What if your tenant needs it at the same time as well?
You may need to agree about these types of things as well before you decide to move someone in.
Is Airbnb A Better Choice?
Would you have a better experience just renting out your extra room with Airbnb? This is something you may need to ask yourself.
If the rent you are going to charge for the room is $400 per month… would you be better off trying to rent the room out 8 times per month on Airbnb for $50 a night instead?
Your geographic location may actually play into this more than anything else. Obviously, Airbnb is not as ‘guaranteed’ as a tenant is. But it also has the potential to earn you a lot more money than you would normally make.
If you live in a very tourist-centric location, you may actually end up doing better with Airbnb than you would getting a permanent tenant. But this all really depends on your situation.
Preparing Your House For A Renter
You may also need to prepare your house before you rent it out. In knowing that you will have someone else sharing the space, you will likely need to spend some money getting everything whipped into shape and ready to show potential tenants.
This means replacing or repairing broken fixtures, appliances, and other items. It also usually means installing dead-bolts or latches on all bedroom doors, and removing locks that could potentially lock people out of their own rooms.
You would also want to stash valuables somewhere safe. You may have been able to leave expensive stuff laying around before… but now, you should probably put your valuables into a safe and keep it locked in your room.
My Personal Feelings About Renting Out A Spare Bedroom For Extra Money
I actually feel like this side hustle could be really good for the right person. Obviously, you need to take your own situation into account.
This may not be the best idea if you have kids, if you don’t have enough room, or if you only have one bathroom in the house. It may also not be the best idea if you like having your space a certain way.
But… if you need some extra income, don’t mind sharing your space with other people, and can find suitable tenants to fill the empty rooms… you could actually earn quite a bit of extra cash this way.
In a sense, this is a very traditional side hustle. Even 60 to 70 years ago, people were renting out extra rooms to make extra cash and help pay the bills.
But today, it may even make more sense. People these days are more strapped for cash than they’ve been in years… and for a lot of people, an extra $200-$500 dollars each month could make a big difference.
At the same time, renting out a cheap room could give someone a place to live for an inexpensive price… so this is really a side hustle that helps everyone.
You may not get rich with this one. But if you are in a good situation for it, this side hustle could actually really help you to get yourself into a much better situation.
Our Final Opinion Of Renting Out A Spare Room
Should you really rent out a spare bedroom to make some extra money?
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