How to Rent out a Room in your Home

Get to know potential boarders before letting them move in.
Image Credit: Clicknique/iStock/Getty Images

Taking in a roommate or boarder is one way of earning money and reducing your housing costs.There are also risks in bringing someone into your home. Screen tenants thoroughly and put your rental agreement in writing. Your boarder is a tenant, so research state and local landlord-tenant laws. If he fails to pay rent or causes problems, you may not be able to make him leave without initiating a legal eviction.

Determine Your Terms

Decide how much rent you want to charge before starting your search. Consider the cost of your rent or mortgage payment, utilities and services such as Internet, cable and landscaping.You should also look at local "room for rent" ads online to see what other homeowners charge their boarders. Decide if you want to bill your tenant separately for utilities, or whether you want to charge one, all-inclusive, rent payment. Other things to consider include the tenant's access to your kitchen and other rooms in the home, household quiet hours and whether you will provide storage or a parking space.

Ask family and friends if they need a place to live or whether they know someone who does. Another option is advertising online, in a local newspaper, or by posting fliers in your neighborhood. If you advertise, include basic information about the room you have available, your neighborhood and any deal-breakers, such as smoking. Don't provide personal information in your advertising. Use an e-mail address to receive responses and never meet someone you don't know at your home. Arrange to meet applicants at a public place to begin the screening process.

Start the Screening Process

If an applicant seems promising, ask for permission to begin a screening process. Consider using the services of an online criminal background check company. You should also verify the boarder's employment and income by calling her employer and asking to see pay stubs. Ask for references from former landlords and roommates.

Create a Rental Agreement

Putting your arrangement in writing offers protection in case of personal or legal conflict. The rental agreement should include financial details, including the amount of rent you charge, when the rent is due and whether you'll charge a fee for late payments. The agreement should also include "house rules" regarding noise, household chores and overnight guests. Some legal aid services provide free sample rental and roommate agreements online.

Understand the Tax Implications of Renting Out a Room

Renting out a room has tax consequences for homeowners. According to, rental income is taxable, so you'll have to report it on your annual returns. You will, however, be able to deduct the expense of maintaining that room, such as utilities and insurance. If you buy items for the room, such as a bed or a desk, those costs are also tax deductible. Talk to an accountant or tax lawyer if you have any questions about tax issues.