Should I rent out a room in my house?
- Do you have enough room for another person?
- Which spaces will you share or keep private?
- Who else lives in the house that you should consult before a tenant moves in?
Consider the personalities of the people who’ll be living under one roof. Does it make sense to put these people together? If not, perhaps a separate suite in the basement or above your garage would work better. Separate suites give tenants more privacy and autonomy, while still providing landlords with that extra income.
What are the legal requirements for having a rental suite in my house?
States, counties, and cities often implement the International Property Maintenance Code (IPMC) when setting out regulations for housing. The IPMC sets minimum standards for housing, and your jurisdiction may adapt this code to align with local laws and practices. For example, in Austin, Texas, a violation of the property code is a misdemeanor punishable by fines up to $2000.
Consider getting a professional home inspection done to identify any problems that may cause you to fail a safety inspection. Some municipalities may require you to pass a safety inspection to operate a legal rental suite. Although changes to your home’s foundation, plumbing, or electricity can be expensive, it’s important that your home meets all structural standards before a tenant moves in.
Not only should your house comply with building codes, but you must also comply with federal and state landlord-tenant laws. All landlords in the United States must follow the obligations in the Uniform Residential Landlord and Tenant Act (URLTA) of 1972, which requires landlords to maintain a habitable dwelling and make all necessary repairs. Many jurisdictions also have specific requirements for landlords to take care of their property and communicate issues with their tenants.
Though you may be friends with your housemate, you must still act professionally. Tenants have property rights and can take legal action against landlords that violate them. For example, it might seem okay to open your friend’s door and check on them. But tenants have a right to privacy and reasonable notice from a landlord that intends to enter their suite.
What are common requirements for a basement suite?
- The house must be a single or semi-detached house.
- The location must be appropriate according to zoning by-laws.
- The city must issue you a building permit before you begin any construction.
- The home cannot alter its outside appearance (to have little impact on neighborhood aesthetic).
- The basement apartment must be smaller than the primary unit.
- The basement apartment should have a separate exit accessible for emergencies.
- Windows must be large enough for emergency escape.
- Basement ceilings must be a certain height (usually, at least 6.5 feet).
- Doors and walls may need to be fire-rated to prevent fires from quickly spreading.
- You must provide an appropriate amount of parking to all tenants.
- Install smoke/carbon monoxide detectors
- Include a fire extinguisher
- Update old wiring/electricity sockets
By ensuring building safety, you can mitigate the need for disruptive repairs when a tenant resides in the building. Plus, as a landlord, you are liable for any injuries that might occur on the property. Get landlord insurance if you want to protect yourself from certain liabilities and insure the house and its contents properly.
Once your home meets general building codes, you can start adding the needed appliances, furniture, and final details.
What should I upgrade or renovate in my basement suite?
How do I prepare to lease a rental suite in my house?
1. Ensure your house is up to code.
Research the property codes that apply in your area. Get a professional home inspection to help identify the renovations your home may need before you can turn it into a rental property. Consider making any upgrades that would appeal to tenants.
2. Know the rights of both a landlord and tenant.
Review your obligations as a landlord. Create a positive relationship with your tenant and act within the law.
3. Obtain landlord insurance.
Housing authorities may require you to purchase landlord insurance. In some cases, you may be able to upgrade your home insurance policy to account for tenants.
4. Create a Rental Application and vet tenants.
Use a Residential Rental Application to collect information such as landlord references, credit checks, and criminal background.
5. Sign a Rental Agreement with the tenant.
Whether you’re renting a full basement suite or just a room in your house, having a valid contract protects both you and your tenant in the event of a dispute. Create a Residential Lease Agreement to document the terms and conditions of the living arrangement.
If you’ll be living with the tenant and wish to address details on shared spaces and house rules, create a Roommate Agreement as well. This contract covers things like chores, quiet times, and rules for parties or gatherings.
6. Keep accurate records.
Use a Rental Inspection Report to document the condition of the rental property before a tenant moves in (and after they move out). An inspection helps determine who is responsible for any needed repairs.
Use a Rental Receipt to keep a record of your tenant’s payment history, and remember to claim your expenses and income when filing your taxes each year.