Understanding a Room Rental Agreement

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If you are searching to make extra income or want to reduce, then consider renting out one of your empty rooms before you decide to sell your home.

People who rent out rooms may be custodial parent  or they may be younger people who have extra space and need additional income to cover the homeowner’s loan.

If you have extra rooms, you can increase your income by renting out a room in your house.

Before you decide to rent a room, though, you should have a room rental agreement in place to protect you and to describe what the renter can and can’t do in your home.

Offering a single room rental

As you consider renting out a room,there are some fundamental rules which you will want to take into account.

After all, you will be sharing common space with your tenant. depending on how your house is configured. If the tenant will have a separate entrance with their own kitchen and bathroom, then you are sharing the kitchen, bathroom,laundry room and common areas 

Before renting the room do your homework. Find out if your zoning laws allow room rentals or whether you need a permit or licence to have tenants.

Also receive clearance from the building department if the room and house need to be inspected. Determine Whether you are renting the room furnished or whether the tenant will bring their own furniture.Decide how many suitcases they can move in.

You can screen your applicants and rent to whomever you want, but you will need their written permission to run a credit check.

A good rule of thumb is not to rent to friends or family because when renting out a room you become their landlord and this is strictly a business transactions. 

If you have to collect late fine or check out a tenant, it will be easier if the tenant is a stranger.

Creating House Rules 

Think about what you want and what you do not and create some basic house rules.

Note down your house rules and refer to them in your room rental agreement.

Your can include the following things  into your rules by asking the renter not to :
  • Play music after 10 PM or whatever hour you select.
  • Do laundry after 10 PM
  • Use common areas after 11 PM
  • Smoke anywhere inside or outside the premises.
  • Use illegal drugs.
  • Bring in a pet.
  • Have a water bed.
  • Keep lights and appliances on when not in use.
  • Have parties of any kind.
  • Have hoiseguests for more than two nights in a month.
  • Paint their room.
  • Park in the unauthorised areas.

These are just some sample rules that you can implement and include in your rental agreement.

If you sense that the applicant wouldn’t honor your rules, movie on to the next applicants.

Advertising for a Tenant 

Before putting out an add, know what you want in an ideal tenant

For example you can put in your ad that you are looking for a nonsmoker and someone who will respect your house rules.

Don’t put anything discriminatory in your ad because you can run a foul of the federal fair housing act.

You can put up floers in town on bulletin boards, or you can hang them in college campuses if you want to attract college students.

You can also advertise in the local newspaper, online or free weekly papers.

What details to include in a Room Rental Agreement

Rental agreements for a room should contain all the necessary details or you could run into future problems. If you have any doubt about understanding what belongs in a room rental agreement, consult a real estate or landlors tenant attorney.

If you prepare the agreement yourself,  keep the original for yourself also make copies. 

Your room rental agreement  should include the following :

  • Your name, address and contact information including the word “Landload”
  • The applicant’s name and contact details.
  • The location and address of the property.
  • The room description,so there is no confusion.
  • The term of the agreement such as month-to-month, six months or one year.
  • The rules of the house, type them up, attach them and refers to them in the agreement as Addendum.
  • How much rent you are charging and when it is due 
  • What fees you are charging id the rent is late.
  • What chores the tenant must do and when?
  • Whether the room rental includes utilities and what utilities you are including, consider raising the rent if you are including utilities.
  • The amount of the security deposit
  • That the tenant agrees to keep the premises inside and out, in good condition and to advise you in writing if there are any habitability or repair issues.
  • What you providing such as a parking spot, smoke and carbon monoxide detector in working condition and bedroom locks .
  • If the tenant can sublease the room and if so under what conditions. 
  • Both of the landlord and tenant must allow “quiet enjoyment” of the premises, which requires that each party has peace and  privacy in their separate areas and the right to use the premises as agreed.
  • That the tenant will hold you harmless from any liability unless the liability is die to your negligence.
  • That this agreement and the addendum constitute the entire agreement.
  • Signatures and the date signed with the words Landlord and Tenant under each name.

Keep in mind that as a new landlord, you will have to report the rent you receive as income but you are also allowed deductions for making improvements for the tenant. 

In general if you don’t want to add a side job to your resume, renting out a room in your house may be the best way to generate additional income.

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