Is Renting Out a Room In Your Home a Good Idea?

By Sue Richey

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Have you ever considered renting out a room in your Northern Virginia home? You may have extra space in your home, like a guest room or a basement, that isn’t being used. Renting it out could bring in some extra income and help lighten the load of your mortgage. As a residential property manager, I get asked about this option all the time—living in your home while renting out part of it.

If you’re considering it, let me walk you through the pros and cons so you can make a well-informed decision.

The pros of renting out a room:

1. You can earn extra income. In high-cost areas like Washington, D.C., a single room in a shared home could rent for around $900 per month. That adds up to roughly $10,000 a year, which can go a long way toward covering your mortgage, paying your property taxes, or simply giving you more financial flexibility.

However, it’s important to remember that rental income is taxable. You will need to report it when filing your taxes. The good news is that certain expenses related to renting the space, such as cleaning, repairs, or upkeep, may be deductible.

2. You can make better use of unused space. If you have a guest room that is rarely used, that space could be working for you instead of sitting empty. Renting out that underutilized area of your home creates an opportunity to generate income from what would otherwise be wasted square footage.

3. You can share some expenses and responsibilities. In many cases, landlords and tenants agree to share the cost of utilities, internet, and even streaming services. Some people even share chores like basic cleaning or minor maintenance. These shared responsibilities can ease the financial and practical load of running a household. However, this type of arrangement is usually more comfortable if you already know the person. Otherwise, it can become awkward or uncomfortable.

With that said, here are the cons of renting out a room:

1. You will lose some of your privacy. This is often the biggest downside. Even if the tenant has a private suite or a separate entrance, their presence in your home means that it no longer feels entirely like your own. You might be sharing the kitchen, bathroom, laundry area, or even just the general living environment.

2. You may encounter personality or lifestyle conflicts. Even tenants who pay their rent on time can have habits that are difficult to live with. They might talk loudly on the phone, entertain guests frequently, play loud music, or cook foods with strong odors that you find unpleasant. Because they are paying for the space, they are entitled to live in a way that suits them, but that does not always make it easy. Living with someone is very different from simply being their landlord. In this situation, you become both a landlord and a roommate, and that dual role can be challenging to manage.

3. You take on landlord responsibilities. Most people decide to rent out a room simply to earn some extra money, but it’s essential to understand that you’re also taking on the responsibilities of a landlord. That means you need to have a lease agreement in place, and you should thoroughly screen potential tenants.

This includes running a background check, verifying their income and employment, contacting previous landlords, and checking their criminal history. Skipping any of these steps could lead to serious problems later on.

You should also be prepared to respond to maintenance requests more promptly than you might if you were living alone. Minor issues that you would otherwise overlook may be unacceptable to your tenant.

What to do if you decide to rent out a room? If you plan to rent out part of your home, there are a few key things you need to do to protect yourself and your property:

1. Screen your tenant thoroughly. Make sure to conduct a credit check, verify employment and income, check references from past landlords, and run a criminal background check.

2. Establish clear house rules. Decide in advance how you want to handle issues like quiet hours, guest policies, and cleaning expectations. Put everything in writing and include it in the lease agreement. Indicate how expenses will be divided, what responsibilities each party has, and what the expectations are for moving out.

3. Understand local laws and regulations. Be sure to check the rules in your state and county regarding what is allowed. Some tenant protections may not apply to owner-occupied rentals, but there may still be legal requirements for advertising, lease terms, or safety codes. If you are thinking about setting up a basement suite, for example, make sure that the arrangement is legal in your area.

Renting out a room works best when it is set up to minimize disruption to your daily life. Just be sure to keep everything legal and in compliance with local codes. Most importantly, prioritize your safety and peace of mind. No amount of rental income is worth inviting someone into your home who makes you uncomfortable or compromises your privacy.

I hope this helped you think through the idea of renting out a room. If you have any questions, just call 703-471-4800 or send an email to info@richeypm.com. I’m happy to help.