Renting Out a Room in Your House

Video Transcript

"Well there's many reasons you may want to rent out a room in your home, the garage in your home, your basement, etcetera. You may be a young person just buying your first property and you just can barely make that mortgage payment, you may be someone who'd just went through a divorce, your spouse has left and now you're sitting in a house with extra space. That extra space is costing you money and taxes, utilities to heat it, to put electricity in it, it's basically wasted space and now you can turn it into part of a...you know, into an asset that generates income. So it's a very smart financial move to take that extra space and have it generate income. Now there's different ways you can do it. You can actually rent that space out to a person and have them live in the home with you, or you may take that space and rent it out to someone who's going to store something there. For example, if it's a garage, you may rent out a garage bay to someone who has an automobile or perhaps they have a motorcycle and they just need a place to store it. So you kind of gotta look at that, determine which one it's going to be. In either case, you're still going to want to have a lease for that rental space, okay? If you're going to rent to somebody who's going to live with you, obviously you're going to want to do a credit check on the individual, you know, going to want to make sure that you are compatible with that individual. I would be very cautious renting to friends. A lot of friendships end when people live together. You're probably better off renting to a stranger, interviewing them, and then letting them keep their a, their space, if you will. Give them their privacy. Let them have their own room, shared kitchen privileges, etcetera. Work out a lot of these details ahead of time in the lease agreement. But again, I really caution you if you're going to rent a part of your home to someone that you are personal friends with."