You Might Be a Landlord (And Not Even Know It)

Ask people who rent out rooms in their homes what they call themselves, and you’re unlikely to hear the term “landlord.”

That’s because many people who rent rooms think of their tenants as “roommates.” For room renters and house hackers (those who intentionally rent out one or more rooms to cover expenses), the arrangement doesn’t feel like a traditional landlord-tenant relationship where the landlord lives in a separate residence. The two share the same property.

When socializing, “Nobody ever asks, what are you?” Sara Capra, a landlord and current TurboTenant employee, said. “If somebody did, I would have said I’m simply renting out a room to someone. Friends and family never referred to me as a landlord, either, and just thought I had a roommate.” It’s easy to explain a situation like hers to non-real estate investors who don’t have the knowledge or vocabulary to understand the arrangement.

So, while she took diligent steps to become a landlord, she didn’t call herself one. The real aha moment came when she began to self-identify as a landlord. That change in mindset forced her to think about her role differently, which led to more helpful information surfacing.

Not Your Traditional Landlord

Because of her position at TurboTenant, Capra regularly speaks with people in similar situations. “House hacking,” for instance, isn’t always a familiar term for landlords to describe what they’re doing. And, because these homeowners don’t always have the role of “landlord” in mind, they’ll often say, “I’m renting out my basement.”

Ultimately, “The situation doesn’t always lend itself to feeling like we’re landlords in the traditional sense,” Capra said.

But just because they don’t feel like landlords doesn’t mean that they aren’t. High housing costs remain the norm, and many people will enter room rental agreements due to these costs. The U.S. Census Bureau reports that almost half of renter households are considered cost-burdened (spending 50% of income on rent). Further, the study reveals that 18.8 million homeowners spent more than 30% of their income on housing costs.

With steep costs for many owners and renters, we expect the need for roommates to remain high.

The Need for Roommates

When Claire Altenau, a TurboTenant employee and accidental landlord, bought her condo in Vail, Colorado, everything seemed to line up. She secured the down payment, the price was right, and Vail was close to all the snowboarding she could dream of. However, high living costs led her to consider renting out her second room.

“We got into the house, and I want to say within the first couple of months, I realized that with my income, I was going to be able to make it, but just barely,” Altenau said. “I obviously wanted to have a good quality of life, so we decided to get a roommate.”

She’s far from the only one to make this decision. The Pew Research Center reports, “The nearly 79 million adults living in a shared household include about 25 million adults who own or rent the household.” But think tanks aren’t the only ones taking note of the high rate of cohabitation.

In 2024, Zillow expanded its rental listing site to include room rentals, indicating a need for more affordable housing. It’s easy to see why. According to Redfin, rent averages $1,605 per month across the U.S. In some states and cities, prices are much higher; room rentals offer tenants on tight budgets a less expensive alternative to renting alone.

Typically, tenants can expect to pay $600 to $1,500 per month for a room. Depending on the room and the property’s location, these room renters could save significantly each month compared to renting an apartment or a single-family home. And for homeowners needing a little extra cash, renting a room provides some much-needed breathing room.

It’s a win for both sides. But, those renting their homes should understand that while their tenants may feel like roommates, they’d benefit from ensuring they’re legally protected in case anything goes wrong.

The Knowledge Gap

Experienced landlords and property managers have defined processes for marketing their properties, screening tenants, and signing leases. However, it’s a whole new ball game for those new to the process.

When asked what she wished she knew when she first started renting the room, Capra zoomed out. “I wish I would have had a workflow in place,” she said. “I don’t know if I’ve met any landlords who, when they first started out, had a clear picture of the major milestones in the renting process.”

Because these situations evolve so quickly, homeowners often omit key pieces of the puzzle. “We found a friend to live with us, but he didn’t sign a lease,” Altenau said. “So he lived with us for 5 months, we had no paperwork, and we didn’t require him to pay a security deposit. We made some basic, preventable mistakes. If anything went wrong, and we were lucky nothing did, we hadn’t protected ourselves properly.”

Ultimately, those embarking on a house-hacking or room-rental endeavor should prepare for a new title: landlord.

From Roommate to Landlord

If you find yourself an accidental landlord, protecting yourself while renting out a room is much easier when you understand your role.

Think back to when you were a tenant and tried to understand your responsibilities by putting yourself in your old landlord’s shoes. You applied to the property, were most likely screened for criminal and eviction histories, signed a lease, and paid rent. Perhaps you made maintenance requests from time to time.

Now, it’s your turn to establish a system for completing your tasks. The key to developing this system is using property management software to consolidate all your duties on a single centralized platform. This way, you can effectively manage your room(s) without relying on one-off tools like individual text messages, outdated spreadsheets, or recycled lease agreements.

For example, some free and low-cost platforms enable landlords to market their properties, screen applicants, collect rent, communicate with tenants, and create lawyer-approved leases from a central hub. Because legal professionals equip these systems with fair housing and state-specific laws in mind, you can take time to learn these complex rules and regulations while responsibly managing your tenant and property.

When you start the relationship with compliant lease agreements and rent payment records, you’ll have solid documentation if the worst happens and you end up in court attempting to evict a room renter. When asked, Capra agreed.

“That’s something that many landlords don’t think about until they reach that point. Then they’re stressed trying to find important text messages or receipts from weeks or months ago.”

So, start out on the right foot and use landlord software to get the ball rolling toward a successful rental operation.

Whether you continue to refer to yourself and your tenants as roommates is entirely up to you.