Renting out a room to a stranger

Ok, so I've been needing to rent out the extra room in my home for awhile now. I work part time now and attend school which has put me in a tight position for money. I mean, full time student with part time job making mortgage payments. Pretty insane, huh? I've been borrowing money from my money market account with my college fund but I must stop doing this. Since my efforts to find a roommate within my group of known friends/co-workers have failed I need to resort to renting out my room to a stranger.

With this I am a bit concerned. What is the best way to go about it? First of all, I'm thinking about advertising on campus first. Only thing I'm concerned about is them hosting parties or bringing bad people into my home.

What should I do to prepare before hand? Should I do a background check on whoever moves in? Do I need to have some sort of contract made? What type of deposit should I require? I want to know what I should expect to do before I put an ad out to the public. Should I include utilities in their monthly bill and make strict rules on running the heater/AC?

If anyone has experience with this please let me know.

How ya doing, buddy?

I rent a room from a friend but previously I used to rent on the open market.

Get a deposit. A months's rent is standard here. Also get a contract. You can download sample ones off the internet but if you've got a spare $100 or so, get a lawyer to do you a proper one. These things are both essential.

In my experience, both while at uni and since, it's far simpler to include all bills in the rent. That way you don't argue over them and you're not relying on someone else to pay them so you won't ever get cut off. You should obviously charge a higher rate to include the bills.

You need to interview any potential room mates. Sharing a house can be quite stressfull if you're with the wrong person although it's awesome with the right person so have a decent chat with them and don't choose the first person who applies. Make it clear that it's your house and they'll abide by the rules so won't be bringing back half the football team every night. In your situation, you might be better off advertising at work rather than college. Young professionals make for far more pleasant housemates and you know they have a steady income.

The easiest thing to do by far is to contact a letting agency and get them to find you a housemate. They'll take care of deposits and contracts, generally have a good references system in place and will collect the rent for you. Downside is of course that they'll take at least 10% in commission but that's what you pay for reduced hassle and piece of mind.

There's nowhere I can't reach.

Trying to move out of grammies house is proving tougher than I thought, given that most rental prices haven't dropped much, despite the crashing market.

Never heard of a letting agency though. I'll have to check that out. What would it be under in the yellow pages?

This thing is sticky, and I don't like it. I don't appreciate it.

Originally Posted by Shin

You need to interview any potential room mates.

This is a definite. Not just because you'll want to know them, but they'll want to know you, as well. I'm sure they're just as nervous about moving in with a stranger as you are about a stranger moving in with you.

At this 'interview', you'd discuss things like 'party potential' (as in, who can be over when) and just general rules that you'd like to have laid out. It can get rid of so much hassle to have things laid out first thing.

I am a dolphin, do you want me on your body?

I'd echo the point made about interviewing potential roommates. Probably really obvious, but you're going to have to make it clear to the person moving in what you will and won't tolerate, so far as hours for bringing guests ("bad people") over. I've been in instances where roommates have brought over rowdy crowds after 3 am, without regard for the fact that I had 8am class the next day.

Also, find out whether he/she's a night owl or not. If you have thin walls and a person who uses stereo sound for music, don't let them hinder your sleep by telling them beforehand to use headphones, etc.

I was speaking idiomatically.

Originally Posted by Zephyrin

Trying to move out of grammies house is proving tougher than I thought, given that most rental prices haven't dropped much, despite the crashing market.

Never heard of a letting agency though. I'll have to check that out. What would it be under in the yellow pages?

Generally they'd be under Letting Agents although there might be a different term for them in the US. Try looking under Estate Agents (Do you call them Realtors or something?) or best yet, check out the property section in your local paper, I'd be amazed if there isn't a local letting agent listed in there. Unless of course it's an entirely British concept but that would surprise me rather.

What kind of toxic man-thing is happening now?

It would most likely be a Realtor here. I don't know how often they're used for just apartments, though. The only times I've dealt with agencies when looking for apartments was when I was trying to find an apartment to rent and they owned a bunch of buildings (in which case they were more of a landlord than anything else). George's first job in Seinfeld was actually as a realtor for rental properties in NYC, actually.

I'd recommend advertising at work/school first, and if that doesn't work out you can try Craigslist or the newspaper. You have to remember that you own the property here, so you get to make the rules and you're responsible for having things working.

You'd need to set up guidelines for guests (overnight and otherwise), utilities (including cable and internet, if you're going to have them), sharing of pots/pans/dishes in the house, and all those sorts of things. If the room you're subletting out is furnished, you can also charge a bit extra too.

I'd start by looking on Craigslist for properties similar to what you're offering in your area, see how much they cost, and then figure how much you need to rent that room out.

FELIPE NO

I agree with what everyone has said here.

The tricky part is that you are sharing the house with the person.

A few things:

1.) Have a deposit for at least one month's worth of rent. State that it will be returned upon a.) thorough inspection of where they stayed and b.) upon staying the full length of time specified within the contract.

2.) Require references. I would suggest at least two personnel and two work references. For each, you should get a number, an address, what their current occupation is and when they can normally be reached. Make sure you call those people with a few pre-determined questions to ask about the potential rentee. If they had a previous landlord that speaks English or whatever languages you can speak, encourage him/her to be included as well.
I should note that there are some irregular situations with this one. When I returned, I have lived in China for three years so I didn't have a landlord, didn't have to pay rent, etc. My landlady I think gave my and my wife the benefit of the doubt (although honestly she was renting out the entire apartment, not a space).

3.) Have a very detailed list of rules and regulations. Some things to consider:
Bed Time/Quiet Time - What time should things become quiet.

Lock-Out and Leave time - What time will you lock the door (if that is an issue)? What time do people need to leave? Are there special circumstances (fiancee, etc).

Smoking - Do you allow smoking? If so, where? Would there be any extra fees (remember that the smoke can damage the property over time).

Water Beds - Do you allow this (thing of the potential mess)?

Pets - Do you allow pets (think of the potential mess)? If so, which types and how many? What about the noise factor (some dogs bark really loud)?

Time Payment is Due - When is payment due? If it's overdue, what is the penalty? How many strikes do they get before you throw them out?

Walls and Furniture - What furniture, if any, do you provide to their room? What policies do you have with the furniture? For the walls, are they allowed to hang stuff up, tape stuff up, paint it, etc?

Rest of House Furniture - What rules do you have with regards to furniture in the house? What about cleaning?

Cleaning - What rules do you have regarding keeping the house/room/dishes clean? What penalties do you have? How many strikes do you give them before a penalty/throwing them out?

Permission - What things can they do WITHOUT your permission. This is much easier than listing the things they can do with your permission.

Cable/Internet - How are these luxaries and others handled? Do they ahve to get a seperate service, do they get on yours for a fee, or do you throw them in? What happens if the individual wants a.) more channels, b.) pay per view, c.) faster Internet or even d.) less channels/slow Internet for a cheaper price?

Private Corners - What parts of the house are yours alone and should not be entered?

Parking - Where can the person park?

Special Rules - Any other special rules (e.g. Never use the dish washer because it's too expensive, heat should never go beyond a certain temperature)?

4.) Make sure they know of the necessary information ahead of time. That includes trash pick-up, etc.

5.) For water/electricity/heat, this is tricky. A few basic thoughts on each:

Heat - This shouldn't change too much even with a second person in the house unless you have been heating/cooling one portion of the house only. I would find out the average between each season. I would then average that together to get a yearly average, add ten dollars (for the added heat/cooling that extra person might have), divide that by two and add that into the rent. You can state that if the bill goes over a certain point (10 dollars over the average for that season) that you can charge extra.

Water - This will most likely double depending on what you use water for. Some questions might include things such as do you use a dishwasher, is sewage/trash pick-up included, etc. If anything, double the amount, then divide that in half and add it to the rent.

Electricity - This is the hardest one. The person living with you could be gobbling kilowatts up as if they were going out of style or they might hate almost all things electronic. I would almost suggest having this as seperate but then thinks would be awkward having everything else as one bill. I suppose you can double this amount, then divide by two and add that portion to their rent.

Keep in mind you might also have them be aware that you'll keep a watch on things. If you see them leaving lights on all over the house, leaving the water running, etc, that you'll charge them extra. Make sure they are aware of specific rules and limits for heat/water usage.

6.) Have two copies of the contract. Both sign a copy and each keeps one.

7.) Interview/do background checks on MULTIPLE candidates.

8.) Check around the area to see what prices are, especially with a situation similar to yours (renting out an extra room). If you have friends who have done this, ask them about it (prices, what they gave, etc). You might even consider pretending to be someone interested in a few places just to get a feel of a.) the competition to see what they are offering comparing to you and b.) how people handle rules/money/etc as they should have more experience.

How ya doing, buddy?

Originally Posted by mortis

Lock-Out and Leave time - What time will you lock the door (if that is an issue)? What time do people need to leave? Are there special circumstances (fiancee, etc).

I'd be inclined to let them have their own door key. You're going to be their landlord, not their mother.

Seriously, what the fuck?

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I'm going through looking for a house to live and here's what I ask potential future roommates:

1) What's the term and conditions of rent/utility payments (who is it paid to, what time of the month are payments due, can they take paypal payments, etc.)?
2) Can I pay 3 months worth of rent in advance?
3) What's the average usage of the utilities?
4) Are any appliances broken that I should know about? (One place had a broken dryer)
5) What is the room temperature like during the hottest/coldest seasons?
6) I like to light candles to relax. Will that be a problem?

There's nowhere I can't reach.