Etiquette, Expectations and Rental Risks, Oh My!
Leasing space in an owned home is becoming more prevalent in many areas in the U.S. due to the affordability factor. Single people in transition, college students and recently divorced adults seem to be the majority of one-room seekers.
Before proceeding forward with a rental agreement, contact community, city or state offices to find out if there any laws or rules. A business license might be required, because, in a sense, you will become a landlord.
Think about how this could also impact Home Owner's Insurance if a tenant damages the home by creating water damage by flooding the bathroom floor, getting injured or accidentally catches the house on fire.
Before taking this on, consider every possible scenario by allowing a stranger into an inner sanctum. Cleanliness, sleeping habits, night life, friendliness, helpfulness all play a cooperative part in living in harmony.
Another thing to consider is, how trustworthy are the people you have invited into your home? What are their friends like? Are they questionable, drug dealers, addicts, hard up for money?
You could leave for work and come home to items missing from a jewelry box, a ransacked house or worse, a cleaned out abode because the renter and buddies packed it all up and left town.
Things to do if you decide to rent out a room(s):
- Use a written lease form
- Create a list of applied rules to follow
- Have all paperwork signed and notarized
- Get references and past landlord information
- Verify a credit check and check online arrest records
- Require renter's insurance and a deposit to be paid in case of damages
Rent money is taxable income and can be claimed as expenses for the space that is being leased. New carpet for an entire house is not deductible but is for the rented bedroom.
Renting out a room is a good source of income and can ease the financial burden for those whose lives have changed since the purchase. It's also important to be aware of all risk factors involved.
Buying or selling a home in southern Utah? Call me at 435.632.9374 or contact me at firstname.lastname@example.org to help because Wanda Can!
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