Dec 20, 2010

Renting Out a Room Helps Defray Costs of Homeownership

Hmm, rents are high, home sales prices are low, and money is tight. What better time to rent out a room in your home, as a way of defraying the costs of ownership until you someday sell?

If you've never experienced a shared living arrangement, you might wonder whether you'll end up either running a commune, living with a dangerous wacko, or simply losing all your privacy. Having rented out many a room in other people's houses myself -- both as a student and as an adult -- I can attest to the fact that it's not as scary as all that. (Though I did refuse to rent from some rather scary homeowners.)

But the key is to set expectations in advance, with a written agreement that actually goes beyond what the average lease does, spelling out things like, "You can't use that closet," and "No overnight guests -- or at least not without my permission." 

If you live in California, you're in luck: Nolo offers a kit for renting out a room in your home, complete with more advice and an agreement form, available at http://www.nolo.com/products/renting-out-a-room-in-your-california-home-kit-PR271.html.