Many seniors rent a room to a boarder to generate a little extra income. Some feel safer, if someone else is living in the house with them. Others negotiate an arrangement for free or reduced cost rent, in exchange for the boarder doing chores around the house. Regardless whether you are thinking about a spare bedroom, basement or garage apartment, or separate tiny home on the premises, here are things a senior should find out before letting someone move into the house or property.
Not every community allows people to take in boarders. Before you invest any money into sprucing up the room or apartment, running background checks and getting municipal inspections and permits, make sure that you may rent out a room or apartment to someone. You could have to pay a fine, besides all your out-of-pocket losses.
Inspections and Permits
Your community might require you to have a government inspection of the premises and a permit for certain types of arrangements, but not others. For example, renting out a spare bedroom in the house rarely requires an inspection or permit, but a garage or basement apartment or tiny house might need them.
Make sure your homeowner’s insurance will cover damage to your property from the tenant’s actions. Some policies exclude coverage, unless you purchase a rider for a tenant or engaging in a commercial activity. Also check to see if you have enough liability insurance, if the tenant gets injured and sues you. An umbrella liability policy added to your homeowner’s insurance might cost you little, but give you great peace of mind.
You must make sure the person who will be moving onto your property is not a danger to your physical or financial safety. Some companies will, for a fee, run a criminal background check and credit report. Just make sure that your prospective tenant signs the appropriate releases for these investigations.
Interview the prospective tenant in person before agreeing to the rental arrangement. If anything makes you feel concerned or uncomfortable, do not go further.
Call the places where the person has lived for the last three to five years. Discover if the person caused any problems, and how financially responsible he was.
Balance the Pros and Cons
Yes, you will be bringing in a little extra money, but that income is taxable, and you will be giving up some of your privacy. If you are a “people person,” you might enjoy having someone around all the time, but if going to the grocery store makes you want to throttle someone, reconsider taking in a boarder.
Make a written pet policy before you agree to rent the room. Many homeowner’s insurance companies do not cover damages from pets on the dangerous list. Certain dog breeds and large snakes, among others, are on these lists. Contact your insurance company for their restrictions.
Write up a list of house rules and include them in the contract. Make sure the person knows of and agrees in writing to the rules, before you waste your time or money on background checks. Your house rules should include things like smoking, pets, use of illegal substances, cleaning, dishwashing, arrival checklist, departure procedure at the end of the lease, parking, utilities, use of common areas, kitchen privileges and furniture.
Your state and county might have different regulations than the general law discussed in this article, so talk with an elder law attorney near you.
Landlordology. “6 Tips for Renting Out a Room in Your House.” (accessed August 2, 2018) https://www.landlordology.com/6-tips-renting-out-a-room/
Kylie Travers. “14 tips for renting your room to a boarder.” (accessed August 2, 2018) https://www.kylietravers.com.au/make-money/14-tips-for-renting-a-room-to-a-boarder/
Bankrate. “How to rent out a room to a boarder.” (accessed August 2, 2018) https://www.bankrate.com/finance/real-estate/rent-room-to-boarder.aspx