How to Rent a Room in Your House

When mortgage payments start to feel overwhelming as that spare room sits empty, it’s hard not to think about how to rent a room in your house. Thankfully, house hacking (or finding a roommate to help lighten your financial load) can help put that unused space to good use.

We’re here to help as you explore how to turn your spare room into recurring rental income. To help, we’ll cover everything house hacking entails, the pros and cons of becoming a live-in landlord, and 13 steps to help you protect yourself if the worst were to happen.

From marketing your room rental to picking the right roommate (and avoiding nightmare ones), we’ll help make the process easy.

So, you want to become a house hacker?

If you’re unfamiliar with the term, “house hacking” means renting out part of your home to reduce your housing costs. It’s a smart way to cover your mortgage, build equity, and stash some extra dough in your pocket each month. If you do it right, house hacking could cover your entire mortgage payment, month after month.

But jumping into renting a spare room without a plan can backfire. Sharing your home is a major commitment that demands careful thought and preparation. Don’t rush into it. Take your time, trust the process, and set yourself up for smooth sailing.

Before getting started, make sure you know what’s to love (and what’s not to love) about house hacking. Doing so will take legal consideration, financial know-how, and realistic expectations. Renting out rooms certainly isn’t for everyone, so ask yourself: Are you up to the task?

Pros and Cons of Renting Out Your Spare Room

Renting out an extra room in your home can be a savvy financial move, but it comes with both benefits and drawbacks. Before finding a roommate, consider the following pros and cons:

Pros

You’ll make extra income: The biggest reason people house hack is simple: extra income. Renting out a room can significantly lower your monthly mortgage payment and ease financial stress, especially when making ends meet feels like an uphill battle.

You’ll pay less for utilities: Utility bills can add up fast, especially in hotter or colder climates. By splitting costs with a roommate, you’ll spread out those expenses and make electric, gas, and internet bills more manageable each month.

You could qualify for certain tax deductions: Once you get a roommate and become a landlord, you may qualify for tax deductions tied to the rented space, which allow you to write off a portion of your repair expenses, mortgage interest, utilities, and depreciation.

You could make lasting connections: Best case scenario? Some renters become close friends, help out around the house, or even turn into business connections. Sharing a home can lead to meaningful relationships that go beyond the typical landlord-tenant arrangement.

You’ll learn how to be a landlord: Renting out a room is a low-risk way to dip your toes into the world of landlording. You’ll learn how to screen tenants, write lease agreements, market your rental, collect rent, handle basic tenant issues, and more.

Cons

Say goodbye to privacy: If you’re used to living alone, get ready to share your space. Another person (or two) means fewer quiet moments, less time to yourself, and more compromises. Sure, you might enjoy the newfound company, but privacy won’t come as easily as it used to.

Personalities could clash: They say you never really know someone until you live with them. A tenant who initially seemed easygoing could turn out to be loud, messy, or simply difficult to live with. And once they move in, you’re stuck with them for the duration of the lease.

You could run into legal issues: Becoming a landlord (even for just one room in your house) means following the rules. Local zoning laws, rental regulations, and fair housing requirements all apply. If you slip up, you could face complaints, fines, or lawsuits.

Your homeowner’s insurance rates may go up: Some insurance providers require a policy update for new renters, which may cause your premium to increase. Furthermore, failing to disclose your rental to your insurer could leave you uncovered if something goes awry.

Things could get awkward: If your relationship with your tenant sours, life can get weird in a hurry. Passing each other in the hallway or sharing a kitchen can become downright uncomfortable when you’re stuck living with someone you don’t get along with.

13 Steps for Renting Out a Room in Your House

Renting out a spare room, especially to a stranger, isn’t something we recommend improvising. The following 13 steps will guide you through everything you need to do, from legal preparation to move-in day. Follow them closely to house hack legally, safely, and with fewer surprises.

Step 1: Consider if Renting Out a Room is the Right Move for You

If you’ve made it this far and feel uneasy about renting out an extra room, pay attention to that instinct. While the extra income may sound appealing, it might not be worth the trouble if your comfort or peace of mind is compromised. Serious reservations might mean this isn’t the right move for you.

Before you move forward, ask yourself a few key questions:

• Am I okay sharing my home with someone else?

• Am I comfortable enforcing boundaries and rules?

• Do I understand my legal responsibilities as a landlord?

Ponder the answers to these questions carefully because once you and your tenant have signed that lease, there’s no turning back.

Step 2: Consult Your State’s Landlord-Tenant Laws

Is house hacking even plausible where you live? Some cities place caps on unrelated individuals living together, while others regulate living arrangements through zoning rules and licensing requirements. Before ever renting out a spare room, brush up on federal and local landlord-tenant laws to learn all the legal language you need to know.

If necessary, complete the proper paperwork, consult with city officials, and take every step to ensure legal compliance for your upcoming room rental. Skirting local laws could lead to legal kerfuffles that flatten your house hacking endeavor.

Step 3: Chat with Your Insurance Company

Before moving anyone in, check with your homeowner’s insurance provider, as renting out a room may necessitate a policy change or add-on coverage. If you decide to skip this step, you risk running into roadblocks if you need to make a claim in the future.

Nobody likes paying for insurance, but what’s worse is filing a claim and learning you’re not covered because of a tenant-related technicality. Get your ducks in a row before moving any roommates in, as insurers may deny coverage if your policy doesn’t account for room rentals.

Step 4: Create Guidelines for Your Ideal Housemate

Once you’ve sorted out the legal and insurance side, picture your ideal roommate. What hours do they work? Are they quiet? Will they keep the place clean? Do they have pets? Will they bring guests over? Write down all your preferences to simplify future tenant screening.

Of course, choosing a roommate must be non-discriminatory. Per the federal Fair Housing Act, you can’t reject a potential tenant based on race, religion, sex, disability, or family status. Be cautious as you set your standards, as breaking these laws could put you in legal jeopardy.

Step 5: Prep Your House for a Roommate

Next, you’ll need to get your place ready for a new housemate. Change the locks, hire a cleaner, clear out the garage, fix anything that’s broken, and designate parking spaces. List the room only after you’ve dialed everything in. Failing to prepare is, after all, preparing to fail.

Getting everything ready ahead of time means no last-minute scrambles for walkthroughs. A clean, organized, and attractive space will signal to potential renters that you’re serious and want to attract that perfect roommate. Skip this step, and you risk scaring off “the one.”

Step 6: Decide on a Fair Rent Price

One of the most crucial steps of being a landlord is setting a fair rent price. Research the local market, consider the room’s size and amenities, and factor in utility costs. Once you’ve tentatively decided on a number, run it by someone you trust to see if they think it’s reasonable.

To make sure you’re not leaving money on the table or scaring off renters with a too-high price tag, use TurboTenant’s Rent Estimate Calculator. Simply enter some data about your rental unit, and the software will generate a fair market rent estimate in just a few seconds.

Step 7: Market Your Vacant Room Across Multiple Listing Sites

Once your property is prepped and priced, it’s time to market your room to a pool of potential renters. For an effortless way to put it on the market, sign up for a free TurboTenant account, upload photos, write a description (or let AI do it for you), and publish your listing across sites like Realtor.com, Rent.com, and Facebook Marketplace.

A thoughtful and correctly priced listing should start pulling in interested candidates quickly. If your inbox is flooded with dozens of inquiries, your price is likely too low. If you’re hearing crickets, your rent price might be too high, or your property listing might need some work.

Step 8: Send Rental Applications to Interested Parties 

Once you have a pool of interested renters, start sending them digital rental applications that collect information like employment history, income, rental references, and screening consent. As always, stay non-discriminatory throughout the application process.

Tenant screening checks are usually processed within 24 hours. Applicants will cover the cost (landlords pay nothing), and the final report includes credit scores, criminal background checks, and eviction history to help you choose between applicants.

Step 9: Meet Promising Applicants Face-to-Face

If you’re going to share your home with someone, it’s an excellent idea to meet them in person first. If that’s not possible, set up a video call instead. Come prepared with the key questions outlined in Step 4. It’s essential to get to know anyone who might become your tenant.

It bears repeating: Stay non-discriminatory as you meet potential tenants and get to know them. That said, it’s completely legal to go with your gut. If nobody feels like the right fit, trust your instincts and start over. When sharing your home, comfort among housemates is paramount.

Step 10: Decide on Your Future Roommate

After reviewing applications, screening reports, and meeting with candidates, it’s time to make the big decision. If one renter stands out (with good credit, stable employment, a clean background, and undeniable vibes), your choice should be simple. Go with the person who is the best fit.

If you’re stuck between qualified applicants, choose a non-discriminatory tiebreaker (like credit score or rental history) to pick a winner. Take your time here; this person will live with you, after all. Once you’ve decided, reach a verbal agreement and move quickly to formalize it with a legally binding lease agreement.

Step 11: Create a State-Specific Room Rental Lease Agreement

To lock in your new roommate, you’ll need to create a state-specific room rental agreement, which should include rent amount, due dates, term (month-to-month or fixed), deposits, utilities, guest rules, etc. This document will be the foundation of your living arrangement.

You have a few options for creating a lease: Go DIY and hope for the best (risky), hire a lawyer to write one up (costly), or use property management software with legally reviewed lease templates to generate one in 15 minutes or less (fast, affordable, safe).

Step 12: Collect a Security Deposit & Set Up Rent Collection

Your lease should already outline the rent and security deposit amounts; now it’s time to collect them from your new tenant. The security deposit protects you from damage or unpaid rent, and TurboTenant’s landlord dashboard will make rent collection smooth, secure, and seamless.

Encourage your tenant to set up recurring payments to avoid missed rent. You can also set up automatic late fees for late rent, report on-time payments to credit bureaus, and sync it all with bookkeeping software through TurboTenant’s rent collection and accounting tools.

Step 13: Conduct a Move-in Walkthrough & Welcome Your New Roommate

Before your new roommate moves in, conduct a thorough walkthrough with them to document the rental’s condition. Photograph the existing wear and tear and complete a digital condition report. The purpose here is to avoid disputes over damage when move-out time eventually comes.

Once you’ve completed the condition report, it’s time to move them in. Hand over the keys, go over any last-minute questions, and start things off on the right foot with a comfortable room that’s ready to live in. Congrats! You’re now a house-hacking landlord.

Rent Out Your Extra Room with Help from TurboTenant

We here at TurboTenant wish you the best as you learn how to rent out a room in your house. To help you along your journey, we’ve developed industry-leading landlord software to simplify the entire landlording process, allowing you to rent with confidence.

Beyond finding that dream roommate who helps pay your mortgage, TurboTenant can streamline rental applications, screen tenants, generate lease agreements, collect rent, coordinate maintenance, handle accounting, and more.

Sign up for a free TurboTenant account today to join over 750,000 independent landlords and house hackers who manage their rentals with ease.

FAQ: Renting Out a Spare Room in Your House