Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
If you’re thinking of renting out a room in your house to earn some extra cash, it may not be as easy as it sounds. To help you find the right fit for you and your home, here are seven tips when renting out a spare bedroom.
If you had visitors coming to stay, you’d likely prepare your home to welcome them. Renting out a bedroom to a tenant means you’re welcoming another person, so presenting the home nicely can definitely help you find the right person. Ensure there’s enough space for another person to live comfortably, your utilities are all working and in order, and you’re ready to start sharing your living spaces.
If you have a few bedrooms in your home, you may not know which bedroom to rent out. It may be helpful to consider its proximity to bathrooms, whether they have their own bathroom, how big it is, and so on. Pick a good room and do some research to find out what a room like yours typically rents for. If you’re keen to make as much money as possible, you may want to consider renting out the biggest room.
In order to find a tenant, you need to let tenants know your room is available. Advertise your property online to showcase your home. Make sure the photos are of good quality and that they showcase the room, house, perks of the area and so on. You may also like to advertise your home on Facebook; there are a number of groups focused on finding flatmates.
When you find someone you think might be a good tenant, it’s important to cover your bases. You should ask for a previous landlord so you can conduct a rental reference. Ask questions about what kind of tenant they were, whether they paid their rent on time and so on. You may also want to do an employment confirmation to ensure they have a stable job and income. You could even go as far as checking your state or territory’s “tenancy blacklisting” site. For example, Queensland’s tenancy-checking site is called TICA. If your potential tenant’s name pops up, you may want to reconsider renting to them.
If you’re a particular person, you may find it helpful to set some house rules. For example, you may ask them to take out the rubbish bins every second week, always wash their dishes when they’re finished with them, or any other rules you see fitting. Living with another person can be tough and there may be little conflicts here or there. Setting some basic house rules can help stop unwanted tension and keep your home clean and tidy, just how you like it.
Even though they’re only renting a room in your house, it’s still important to get a rental agreement drawn up in writing. Having a signed rental agreement can safeguard you in case anything goes wrong, like they refuse to pay rent or won’t leave on vacate day.
Ensure to include information, including but not limited to:
Even though you’re only renting out a room in your house, it’s still considered an investment property. This means there are things to keep in mind such as getting the appropriate insurance, sorting out your home loan (do you need an investment loan now?) and knowing your legal obligations and rights.
Once everything is properly set up with your new investment property, you will see that the money will start rolling in. This can help take some of the pressure off your monthly mortgage repayments.
If you’re unsure about what may happen to your home loan when tenants move in, be sure to speak with your home loan lender. It’s always better to be safe than sorry and to check off all your bases before your new housemate moves in.
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