10 Steps to Renting a Room in Your House

Whether you want extra cash to supplement your income, or you need help with paying your mortgage, renting a room in your house solves two problems; housing for someone who needs one, and extra income for you.

But renting out a room in your house is not for everyone; consider the benefits and the drawbacks to see if it’s right for you.:

Pros and cons


  • ⬥Extra cash to:
    • Pay off your mortgage faster
    • Pay for upgrades and/or home maintenance costs
  • ⬥Help with chores (if applicable)
  • ⬥Sense of security because someone else is in the home (if you’re normally alone)
  • ⬥Someone to watch over the home and any pets if you’re gone


  • ⬥Safety concerns (if you’re renting to a stranger)
  • ⬥Concerns of damage or theft
  • ⬥Guests brought in by the tenant
  • ⬥Personality or lifestyle habits that are incompatible with yours

Steps to renting out a room

Assuming you’ve decided that the benefits outweigh the drawbacks, here’s how to rent out a portion of your home to a tenant.

1. Check the landlord/tenant laws in your state

You may not feel like a landlord, but if you’re renting out a room, the law says you’re a landlord. Therefore, you’re bound by the laws in your state that apply to landlords.

Check with the laws that govern housing in your state to see what your responsibilities are.

Common concerns are:

  • ⬥Limits on how many people can live in a property
  • ⬥Liveability standards, such as expectations of privacy, locks, heating, toilet maintenance, lighting, etc. – in some states, tenants can legally withhold rent if the residence isn’t kept in good repair
  • ⬥Landlord obligations in terms of notices, late payments, access, etc.
  • ⬥Homeowners’ association restrictions
  • ⬥Zoning laws


2. Talk to your insurance agent

Review your insurance policy to see if you need any additional coverage such as landlord insurance. Some policies have specific restrictions or will charge higher premiums if you opt to rent out a room.

3. Prepare the house

Look through your home to ensure that everything is in good repair. Next, do the following:

  • ⬥Remove any self-locking doorknobs
  • ⬥Install keyed deadbolts on every bedroom door
  • ⬥Secure all of your valuables in a safe or lockbox
  • ⬥Fix anything that needs maintenance or repairs (e.g. stair railings, steps, appliances, flooring, etc.)

4. Choose what room to rent out

You might prefer to keep the master bedroom for your own use, but is that the best option?

Consider that, if your master bedroom has a private bath, you could charge more for rent, plus it’s more appealing to a prospective tenant to have their own bathroom.

Or, if you have a basement room with a small kitchen and bath, even if it’s a partial bath, that is a good option for both you and a prospective tenant – especially if it comes with a separate entrance.

5. Determine how much rent to charge

Search the rental rates in your area to get a good idea of what you can charge.

If your home has one or more of the following features, prospective tenants would be willing to pay more rent because it improves their quality of life.

  • ⬥Private entrance
  • ⬥Private bathroom
  • ⬥Small kitchen or kitchenette
  • ⬥Amenities such as a fitness center or pool
  • ⬥Barbecue, deck or other outdoor amenity
  • ⬥On-site washer and dryer
  • ⬥Garage space or other off-street parking

Consider how much a tenant will pay for utilities as well. There are two basic types of rent pricing to use if you’re adding in utilities.:

  • ⬥Fixed rent price – price includes utility costs
  • ⬥Variable rent price – base rental price, plus a percentage of utility costs, which varies according to usage

Your local market will decide which of these two pricing schemes would work best.

6. Find a tenant

Post your “room for rent” ad both online and offline. Nearby school bulletin boards, online resources such as Facebook Marketplace and even Craigslist are potential sources of people looking for rental housing. 

Don’t forget to include details such as:

  • ⬥Bedroom size
  • ⬥Included features such as private bath or entrance
  • ⬥Shared spaces such as living room, kitchen or laundry
  • ⬥Off-street parking
  • ⬥Smoking and pet policies
  • ⬥Proximity to shopping and entertainment venues
  • ⬥Other perks such as a hot tub, pool or workout room
  • ⬥Provide a minimum of 10 clear photos of inside and outside living conditions
  • ⬥Include rental terms such as duration, deposit, rent, etc.

7. Use rental applications

Have prospective tenants fill out a rental application.

You should:

Contact previous landlords for information about rent payments, noise, damages, etc.

Learn about prior evictions, notices, etc. (this information should be requested within the application)

Use the employment and income to determine if the tenant can afford the rent

Include information within the lease agreement that stipulates house policies that will exclude renters (e.g. pet or smoking policies)

8. Run a background and credit check

This might seem like a lot, but it’s an important step. It’s better to know about any issues up front, before the lease is signed and the tenant moves in.

A free service known as Cozy can help with this.

9. Use a rental agreement

Use a standard lease agreement and attach a list of house rules to the lease so that everyone agrees, before the rental period begins.

The rental agreement needs to include:

  • ⬥The length of the lease
  • ⬥The amount of the security deposit, when it’s due and the conditions it will be kept
  • ⬥The rent amount, due date and late fees
  • ⬥Whether utilities are included
  • ⬥The terms of use of shared spaces

Resource: Mr. Landlord

10. Keep track of income and expenses

Make it easier on yourself at tax time by keeping track of expenses and rental income. You can use HomeZada to track these expenses and rental income.

For more tips on rental income from properties, see these blogs:

4 Must-Have Documents for Landlords and Property Managers

The 5 Tips To Property Investing You Need to Remember

7 Tips for Cleaning Your Rental Between Tenants

7 Ways To Add Value To Your Rental Property