Your apartment or house isn’t just a place to reside—it can also be a significant source of income. In the new economy, many people are choosing to sublet apartments and rent out rooms in their houses. This can be a significant money boost, but it’s not without complications.
Letting someone else into your living space is a risk whether you’re going to be there or not. Trusting a stranger to live in your home can be difficult, so you should be sure you’ve considered all facets before making the decision.
The Legal Aspect
Before picking a tenant, make sure you’re covered on all potential legal issues. Every city and state has different laws governing tenancy and rentals, so check your city’s government or housing authority and thoroughly read the regulations. Also, if you’re a renter yourself and you want to sublet, this is something your landlord will need to know about. Many leases prohibit subletting, but your landlord may be open to discussing it if you approach them in advance.
It’s less complicated if you’re a homeowner, but you should still be aware of any local homeowner’s association regulations to ensure you don’t encounter any unpleasant legal surprises. Additionally, make sure your insurance is paid up to cover any potential damages caused by the tenant, or accidents the tenant may have on your property. Before renting out your space, make sure your insurance policy covers tenants—landlords may require a separate policy from homeowners.
The Financial Aspect
Renting out your space is a financial transaction, and you deserve to be paid appropriately. Before signing any leases, make sure to do your research. You’ll want to look into other rental offerings in your area to get a good picture of the market and make sure your rate is fair to you and competitive with other options. Going too low or too high is a common mistake. Rent income is taxable, as well, so be prepared to cover this on your taxes. Have a property lawyer look over any contract you draw up.
Collecting rent is a significant part of renting out your space, and you’ll want to have a system in place before you start. It may be tempting to use a platform like Airbnb for short-term rentals, but these platforms often charge a fee that can take a bite out of your income. Make sure to discuss payment plans with your potential renters before they sign on the dotted line, and do a credit check to make sure they’re likely to keep on top of the rent.
The Comfort Aspect
It can be a tricky balance to design a space that’s both appealing to tenants and comfortable for you, especially if you’re going to be sharing the living space. There’s always a fear that the person you’re letting into your home won’t treat it with the same care you do, but there are ways to minimize the risk. Before you open your doors, make sure you’ve placed any important family heirlooms or valuables in a safe location, away from common areas. If you’ll be leaving the space for a while, consider temporarily storing these items outside the home.
Comfort is a two-way street, and you’ll want to make sure your tenants feel welcome. This can be as simple as having a coffee machine waiting for them when they move in, or placing some appealing new art on the walls. This could also be the perfect chance to replace an old mattress with a new state-of-the-art one. Everyone has different mattress preferences—whether it’s for firmness and material. A 15-inch hybrid mattress works great for the average sleeper so it will fit for any tenant.
The Logistical Aspect
Make sure you’ve covered all the practical aspects before renting out your space. How will your tenants get into your home or apartment? If you’re not living there but want to ensure security, make sure to install a keypad lock for easy access. If you’re providing a separate entrance that connects to their living space but not to the rest of the house, you may want to install two separate locks to ensure more security for you.
It’s a good idea to do a complete inventory of your house and look at all possible logistical aspects before moving someone in. Ensure there’s enough parking space for everyone, guarantee a private bathroom for both parties if possible, and consider kitchen access if you will be sharing. Another concern is WiFi—make sure to set up a new guest network, so your tenant has easy access without compromising your security or slowing your service.
Get Ready to Rent
Renting can be rewarding and a great passive income stream. To ensure it goes smoothly, it’s best to prepare well in advance of moving someone in. As long as you consider all aspects ahead of time, you’ll be able to turn a home or apartment into a consistent source of extra money.