Renting out a room in your house: a landlord’s checklist

The short version

Before you list a room, confirm your city allows it and tell your insurer and lender. Write house rules and a room rental agreement first, then screen every applicant against the same written criteria. Do a dated move-in walk-through of the room and shared areas, and keep a simple record of rent received and the expenses you split between the rented and personal parts of the home.

Step 1: Check the rules before you list

• City or county rules: some places limit how many unrelated people can live in a home, require a rental license or registration, or have short-term rental limits for stays under 30 days.
• HOA or condo rules, if you have one: many restrict rentals or require approval.
• Your insurance: tell your homeowner’s insurer you are renting a room and ask whether the policy still covers you or needs an endorsement.
• Your mortgage: read the occupancy terms, and ask your lender if you are unsure.
• Your state’s landlord-tenant law: whether a room renter in your home is treated as a tenant or a lodger changes how you end the arrangement.

Step 2: Decide the house rules

Living with a renter goes better when the rules are written before anyone moves in:

• Which rooms are private and which are shared (kitchen, bathroom, laundry, parking).
• Quiet hours, guests and overnight guests, and how long a guest can stay.
• Cleaning of shared spaces and kitchen storage.
• Smoking, pets, and alcohol in shared areas.
• Utilities and internet: included in rent, or split, and how.
• Locks and keys: a lock on the renter’s door, and who has a copy.

Step 3: Write a clear listing

Describe the room, the shared spaces, the rent, what is included, and the house rules. Describe the space, not the person you want. Federal law bars discriminatory advertising even for an owner who lives on site, so leave out preferences about race, color, religion, national origin, sex, familial status, or disability, and check whether your state or city adds more protected classes.

Step 4: Screen every applicant the same way

Write your criteria down and apply them to everyone:

• Income or proof of ability to pay (a common rule of thumb is about three times the rent; pick your number and use it every time).
• Rental history and a call to a past landlord or roommate.
• Credit and background checks, with written consent, run through a screening service.
• A short in-person or video meeting to walk through the house rules.
• A record of why you approved or declined, so your decisions are consistent.

Step 5: Use a written room rental agreement

The agreement should cover:

• The room being rented and the shared areas the renter may use.
• Rent amount, due date, how it is paid, and any late fee your state allows.
• Security deposit amount and how it is returned, under your state’s rules.
• Utilities and internet, and the house rules (attach them).
• Term: fixed term or month to month, and the notice either side gives to end it.
• Entry into the renter’s room: when and with how much notice.
• Renter’s insurance, if you require it.

Step 6: Document move-in

Walk the room and shared spaces together on move-in day, take dated photos, note existing wear, and both sign. That record is what lets you deduct for real damage at move-out and return the rest of the deposit on time.

Step 7: Keep the money side clean

Keep a simple log of rent received and expenses. The IRS says that when you rent part of your property, you divide certain expenses between the rented part and the personal part, as though they were two separate properties, and report rental income and expenses on Schedule E. A tax professional can help you choose a reasonable way to split shared costs like utilities and insurance.

Mistakes to avoid

• Skipping the agreement because it is “just a roommate.”
• Assuming you can remove a room renter on short notice without checking your state’s rules.
• Not telling your insurer, then finding out after a claim that the rental was not covered.
• Listing preferences about who you want instead of describing the room.
• Changing the house rules after move-in without putting it in writing.

Official places to check the rules

• 42 U.S.C. 3603: Fair Housing Act exemptions — see (b)(2), owner-occupied buildings of up to four units (Cornell LII)
• 42 U.S.C. 3604: discrimination in housing — see (c), advertising, which applies even when the owner lives on site
• IRS Publication 527: Residential Rental Property — see Renting Part of Property
• IRS Topic 414: Rental income and expenses
• USA.gov: tenant rights and state resources
• USA.gov: find your state attorney general — many publish landlord-tenant guides

Make it a system

Renting a room is still running a rental. One written set of house rules, the same screening criteria for every applicant, a signed agreement, and a dated move-in record keep it fair for both of you.