Income’s a slippery customer. Almost everyone, no matter how rich or stable they are, wants more capital to come in from somewhere. I’m sure you remember chasing a job desperately at some point in your life, and wanting a juicier paycheque as soon as you got it! These days, many people are tapping into their houses for income by renting out rooms. If you’re considering going ahead with this, here are some important things to consider.
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First of all, know the laws relating to tenancy in your specific area. Just like anything, there’s all kinds of legalese you need to be aware of when it comes to letting, and they change significantly from country to country, province to province. For example, in the States, you need to give at least 24 hours’ notice before entering a tenant’s bedroom, even though you legally own it. It may feel natural to walk right into any room in your home, but if you don’t give the proper notice you could quickly find yourself in hot water. Read up on the laws for your area, and decide how comfortable you are with sticking to them. It’s always better to find out about these before agreeing to let someone live in your home!
Next, always make a point of figuring out how your personality matches up with every tenant you interview. This may not be a problem when it comes to extensions and granny flats which will have their own entrance. However, odds are you’re going to be sharing at least some space and facilities with the tenant you rent to. Because of this, it’s extremely important to make sure you’re a fairly good match for each other. Obviously, no one’s asking you to make them one of the family. However, if you’re particularly fussy about your home, and the tenant is extremely slovenly, or vice versa, there’s going to be arguments. As you can imagine, this kind of conflict can really make you regret the decision, so don’t ignore personality.
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Finally, come up with an exit strategy. Even if the occupancy is perfectly legal, and you and your tenant get on like the best of friends, you can still run into trouble at some point or another. I remember speaking to one experienced landlord who had a tenant living under their roof for two years where they got on great and had no clashes. However, this all changed once the tenant lost his job, but didn’t want to move out. The landlord in question eventually had to evict their tenant, and subsequently sued them for the rent that they’d missed. Although they managed to retrieve all the capital they had lost, the process was extremely stressful, and could have been avoided with a written tenancy agreement. Obviously you’ll hope everything goes well. If it doesn’t though, you may need a way out.
If you think you’re ready to let out your home to tenants after considering these three points, then go ahead! If you’ve got the stuff to be a landlord, then an easy stream of money is just around the corner.