How to Turn Your Spare Bedroom Into a Source of Extra Cash

written by

Jim Mucci

posted on

November 26, 2024

Want to make money from your extra bedroom? It's easier than you think! First, look at what makes your room special. Is it big? Does it have its own bathroom? Is it in a nice area? These things matter to renters.

Before you start, check with your city to make sure you can rent out your room. Then decide if you want short stays (like a few days) or long stays (like months). Look at what other people charge for rooms like yours.

Make your room look nice with good furniture and clean sheets. Take bright pictures that show how cozy it is. Put your room on websites where people look for places to stay.

Be smart about who you let stay. Talk to them first and make sure they will be good guests. Write down clear rules about what they can and can't do.

Follow these simple steps, and you can turn your empty room into cash!

Assess Your Space's Potential

Let's look at what your room can do for you.

First, get a good look at your room. Pull out a tape measure to see how big it is. Check if the sun fills the room. See if there's a bathroom nearby. These things help you know how much money you can make.

Think about where your home is. You can charge more if you live near schools, work places, or fun spots that draw people. Look at what others charge to rent rooms like yours. You can find this out on Airbnb or in local ads.

Look at how your house is set up. A room with its own door to the outside is worth more.

But if the walls are thin next to your living room, you might've less choices. Make sure to check your local rules too. Some areas say you can only rent for short times, while others want longer stays.

Legal Requirements and Regulations

Want to rent your room to others? Here's what you need to do first:

Check with your city about the rules. Some places need you to get special papers before you can rent your room.

Talk to your insurance company too. Your regular home insurance mightn't help if something goes wrong with a guest.

You need the right kind of insurance to stay safe.

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These steps will keep you out of trouble and make sure you can rent your room the right way.

Local Permits and Licenses

Want to rent out your spare room? First, talk to your local city office. They'll help you know what you need to do to make it legal.

You need a few things:

A permit to rent your room
Papers that say your room is safe to live in
Forms to pay taxes on the money you make

Go to your city hall and ask what you need. Each city has its own rules. Some cities want you to pay fees each year. Others need you to get special papers if you add things like a small kitchen.

Remember to check about taxes too. You may need to collect money from guests and give it to your state. This helps pay for roads and parks that visitors use.

Make sure you do all this before you start renting. It keeps you and your guests safe and happy.

Zoning Laws and Insurance

When you want to rent out a room in your home, you need to check the rules first. Just like you need a driver's license to drive a car, you need the right permits to rent a room. Ask your city if your house is in an area where you can rent rooms.

You also need the right insurance to keep you safe. Your normal home insurance won't help if someone gets hurt while renting from you. Talk to your insurance agent about getting special rental insurance.

Some websites like Airbnb give you some protection, but you should get your own insurance too. This way, you won't have to worry if something goes wrong.

Remember to get both the permits and insurance before you start renting. This keeps you and your guests safe and happy.

Choose Your Rental Strategy

Renting Out Your Extra Room

Having an extra room in your home can make you money. You just need to pick the way that works best for you and your family.

Think about how much time you want to spend on it and how much money you want to make.

You can rent your room in three ways:

Long-term: One person lives in your room for many months or years. They pay you each month. This is easy because you only deal with one person who becomes like family.
Short-term: New people stay in your room for a few days or weeks. You can make more money this way, but you need to clean more and meet lots of new people.
Mix it up: Let someone stay long-term when you need it, like during school time. Then switch to short stays when lots of people visit your town, like during big events.

Pick what feels right for you and your home.

Think about how much work you want to do and who you want to share your space with.

Set Competitive Pricing

Look at what other landlords charge for rooms like yours. This helps you set fair prices that good tenants can pay.

Think about charging more during busy times, like when there are big events in town or when students need housing.

You can also ask for higher rent if you offer nice extras, like a private bathroom or parking spot.

Research Local Market Rates

Looking at what others charge for rooms like yours helps you pick the right price. Just like shopping for groceries, you want a fair deal – not too high, not too low.

When you know what rooms cost in your area, you can find good renters and make money too.

Start by looking at:

Airbnb rooms like yours
Zillow listings nearby
Facebook rooms for rent

Think about what makes your room special:

Does it have its own bathroom?
Is there a place to park?
Can people walk to buses or trains?

Also check if big events or seasons change room prices in your area. Maybe summer brings more renters, or a yearly festival makes prices go up.

Keep checking room prices every few months. When prices around you change, you might want to change yours too.

Consider Seasonal Price Adjustments

Your home's price should change with different times of the year. Think of how busy your town gets during fun events. You can ask for more money when lots of people want to visit.

Look at when your area is most busy. If you live near a college, many people visit when students graduate. Beach homes cost more in summer. Ski homes cost more in winter.

When things are slow, you can lower your price to get more guests.

Watch for big events near you like shows and parties. When these happen, you can charge a bit more, just like other places nearby do.

Add Value-Based Price Tiers

Your home has special things that make guests happy. Let's set fair prices based on what you offer.

Think about what makes your home special. What nice things can you give your guests? Put these into simple groups with clear prices.

Here are three ways to price your rooms:

Basic Room:

Clean bed and room
Shared bathroom
Free Wi-Fi
Fresh sheets

Better Room:

Your own bathroom
TV with streaming
Desk to work
Small fridge
Good coffee maker

Best Room:

Big room with private bathroom
Own door to enter
Place to park
Fresh breakfast
Nice soaps and shampoos

Look at other homes like yours nearby. Make sure your prices match what you give.

When you add new nice things, you can change your prices too.

Prepare Your Room

Make Your Room Ready

Your room needs to be nice for guests. Let's get it clean! Wash the windows, floors, and walls. Take away your stuff. Keep it simple so guests feel at home.

Get good bed items. New pillows, clean sheets, and a nice bed make guests happy. Put in bright lights on the ceiling and next to the bed. Add a drawer for clothes, a small table, and hooks to hang things. Put in a big mirror, a trash can, and spots to plug in phones.

Make sure the room isn't too hot or cold. Fresh air is good too.

Add nice things like a water jug, coffee, or a desk. This will make your room better than others.

Market Your Space Effectively

Make Your Room Stand Out

You want people to notice and rent your room. Here's how to show it off:

Take Great Photos

Open the curtains and take bright, sunny pictures
Show off the best parts of your room
Take pictures of shared spaces like the kitchen
Capture fun extras like your garden or desk area

Tell Your Story

Talk about why your area is great
List fun things to do nearby
Say how close buses and trains are
Be clear about room size and storage space
Let people know your house rules

Set the Right Price

Look at what others charge nearby
Change prices for busy times
Give deals to people who stay longer

Put your room on many websites like Airbnb and VRBO. This helps more people find it.

Screen and Select Tenants

You want a good person to live in your room. Start with a simple check of who they are. Ask where they work and if they can pay the rent. Most people should make about three times what the rent costs each month.

Meet them in person. Talk about how you both live. Share what you expect about noise, cleaning, and sharing spaces like the kitchen. Ask about when they wake up and go to bed.

Call the places they lived before. Talk to people they worked for. Listen to how you feel when you talk to them. You need someone who lives like you do.

Have them fill out a form. Ask for phone numbers of people to call if there's a problem. Ask what they like to do at home.

Take your time to pick the right person. After all, you'll live with them.

Manage Guest Relations

Living with someone who rents from you needs good talking between you both. From the first day, you must set clear rules. This helps make a happy home while keeping things fair.

Talk about: