Guide to Renting Out Your Spare Room
Whether you’re short on cash and struggling to pay the mortgage repayments or your nest is empty and you want some extra money to put in your retirement fund, renting a spare room is a good way to earn extra cash. It’s not ideal for everyone, but if you follow this guide we can help you figure out if it’d work for you and how to go about it.
- First you need to identify the spare room or rooms you’d like to rent out. If you have rooms with a private bathroom or its’ own entrance or even better, a completely self-contained unit, they’ll be worth far more than just a standard bedroom. If you’re not attached to your master bedroom, you could even consider swapping for the smaller room to earn more.
- Do some market research to find out the value of the room. Check TradeMe listings in your area to find prices for something with similar facilities. This will give you a fairly accurate indication of room costs for your area. This way you can also figure out if you’ll keep the room furnished or sell the old furniture. It also pays to figure out if you’ll split bills as they come or include this in the weekly rent payments.
- Make an attractive and appealing ad. You can advertise on community notice boards or in your local newspaper but advertising on TradeMe is the best idea, and will ensure your room is seen by as many people as possible. You can then share the link on your personal Facebook page so your peer group is also aware you have a spare room. Be specific and take lots of photos. Be clear on what access they’ll have to the kitchen, bathroom and living areas and include any perks like a pool or SkyTV. Make sure you’re clear about what kind of person you’re looking for (30+ males only etc.) or rules like no smokers. Be sure to let them know how and when to contact you i.e. txt me or call me any time after 6 to discuss meeting.
- Interview your candidates personally to get an idea of how they’d fit into your home. You may request proof of employment or confirmation they’re studying, or just ask them about their living habits and ask for a few references. Make sure to call the references and check if they paid rent on time and left their room in reasonable condition.
- If you think you’ve found someone suitable it’s important to establish ground rules. Discuss and have them agree to and sign a written rental agreement outlining responsibilities. This should include when where and how rent is paid, any bond needed, house work expectations, procedure and repercussions of late payment, and any specific rules like no pets allowed. This will prevent any misunderstanding later down the track, ensure you’re both on the same page and protect your home and assets in worst case scenario.