Many people like to rent out rooms or parts of their home for extra cash.
While the extra money is nice, there are some concerns as well. Be sure to weigh them carefully, especially if you have a partner. And get on the same page and create a legal contract with your renter to ensure compliance with the law.
Pros:
- Having someone else in the house. This is more likely to be a pro if you're single or your partner is often away. It can be nice to have someone to eat dinner with or another set of hands to do household tasks.
- Extra cash is always nice. You can use this to pay off your mortgage, set aside for the kids' college funds or just enjoy it! Be sure to talk with your tax preparer to find the tax implications on the money.
- Someone to help out in a pinch. Along with them being able to help with a repair, they can manage your pets while you go away on a business trip for a week, or if you have an elderly lady living with your family, she could be home to let your older kids in after school so you don't need to worry about them being home alone until you get home from work.
Cons:
- Your guests may not be as tidy as you'd like them to be, or they may unintentionally damage something. Ideally, you'll have this all written out in your agreement. The guest will be on the line for damages they cause, accidental as they are.
- Depending on the set up of your home, you'll have less privacy. You will probably be sharing an entrance, kitchen and other common areas.
- They may violate your rules by bringing in uninvited guests, having pets, being noisy. Again, set limits on friends, animals and quiet hours for both parities. However, don't unfairly impose rules on your houseguest. A caveat would be if you have a newborn. Obviously you will try to keep her as quiet as possible during the night, but babies don't understand "quiet hours."
- In general, having someone else in the house always poses a safety risk to the homeowner. Make sure you properly vet this person before letting them inhabit your home. You might consider a criminal background check, and ask for personal references.
Make sure that your home insurance covers your home and your property. The living arrangement must not violate your insurance contract. Also, ask the tenant to have insurance, like renters coverage. Such coverage might take care of their belonging in the unfortunate event of a disaster.
All About Insurance can help you meet your home insurance needs. One of our agents can help you get a fast, free quote right now. Call us at (817) 589-0006 for more information.