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I am under contract on a 2BR/2BA condo. After I move in, I was thinking about renting out the other bedroom as it will essentially not be required space for me other than making it a guest bedroom or "game" room of sorts. I figure I may as well try to earn some income off of it.
The individual will have their own room, a bathroom that is accessible to visitors, and a furnished shared living space. I've never been a landlord before, so I'm not familiar with pricing units out. Would you typically charge the market rate for a 1-BR in the area, would you charge less since it's a shared living space, or would you charge more because the unit is mostly furnished and they would only need to provide furniture for their room?
A lot of 1-BRs in the area are going for about $950-$1,100.
Unless the unit is completely separate, they would be your roommate not a tenant. And you would not be a landlord.
To figure out what to charge them, I would take the cost of your mortgage, taxes, condo fee and shared utilities (cable, electric, heat, landline phone if you have one) and divide it in two. It should come out to be several hundred dollars less than what the roommate would be paying if they rented a similar one bedroom and had to pay all of their own utilities.
I would check with your condominium association to be certain the roommate can have a parking space. I would also check with your homeowners insurance to be sure you don't need to pay a surcharge for adding a non-family member to your household.
Unless the unit is completely separate, they would be your roommate not a tenant. And you would not be a landlord.
To figure out what to charge them, I would take the cost of your mortgage, taxes, condo fee and shared utilities (cable, electric, heat, landline phone if you have one) and divide it in two. It should come out to be several hundred dollars less than what the roommate would be paying if they rented a similar one bedroom and had to pay all of their own utilities.
I would check with your condominium association to be certain the roommate can have a parking space. I would also check with your homeowners insurance to be sure you don't need to pay a surcharge for adding a non-family member to your household.
I should still have a written agreement with them about what they are responsible for paying, right? Would that require a formal lease? Or just something I type up and have them sign?
I talked to my co-worker who's leased out her townhome before while living in it. She said she had a lease in place with her co-habitants. I'll do that.
I am under contract on a 2BR/2BA condo. After I move in, I was thinking about renting out the other bedroom as it will essentially not be required space for me other than making it a guest bedroom or "game" room of sorts. I figure I may as well try to earn some income off of it.
The individual will have their own room, a bathroom that is accessible to visitors, and a furnished shared living space. I've never been a landlord before, so I'm not familiar with pricing units out. Would you typically charge the market rate for a 1-BR in the area, would you charge less since it's a shared living space, or would you charge more because the unit is mostly furnished and they would only need to provide furniture for their room?
A lot of 1-BRs in the area are going for about $950-$1,100.
Thanks!
Check with your HOA first. Many places require a background check for anyone living with you including a roommate. If it's not in a big city you might also need a parking space and car sticker if your HOA has that.
You would not charge more for the shared space that is furnished, that's just ridiculous no roommate is ever expected to furnish the shared space. the common area is understood to be furnished.
You have to think if the Wifi, electric and cable is included or not or if costs are split.
Look on Craigslist to get some idea of what rooms are going for in your area.
It's good to have the room unfurnished because that means the person is serious about the place enough to bring or buy their own bed/dresser and it makes it harder to leave. On the flip side you might want someone who is looking for a furnished room. If you furnish it then you can't have someone who wants to bring their own furniture unless you have a place to store yours.
Yes you obviously charge less than a 1 bedroom since they don't have that privacy of their own place.
If one bedrooms go for $950 with utilities it will be $1100. I think you might be able to get $700 to $800 if you include utilities. It depends how nice your place is, the location and if you have a washer and dryer.
Don't get greedy with your prices. Sometimes a roommate's rental income can pay for most of the mortgage depending on where you are.
Also do a background check, credit, eviction and criminal on the person and charge them before they move in. Unless the HOA does it in which case they will charge the person, but they might not do a credit check.
In my area you can't find a small one bedroom for less than $750 (which only includes water) in a so-so area and some people are asking for $600 for a roommate, which is high.
Last edited by LifeIsGood01; 06-18-2015 at 08:34 AM..
Check with your HOA first. Many places require a background check for anyone living with you including a roommate. If it's not in a big city you might also need a parking space and car sticker if your HOA has that.
You would not charge more for the shared space that is furnished, that's just ridiculous no roommate is ever expected to furnish the shared space. the common area is understood to be furnished.
You have to think if the Wifi, electric and cable is included or not or if costs are split.
Look on Craigslist to get some idea of what rooms are going for in your area.
It's good to have the room unfurnished because that means the person is serious about the place enough to bring or buy their own bed/dresser and it makes it harder to leave. On the flip side you might want someone who is looking for a furnished room. If you furnish it then you can't have someone who wants to bring their own furniture unless you have a place to store yours.
Yes you obviously charge less than a 1 bedroom since they don't have that privacy of their own place.
If one bedrooms go for $950 with utilities it will be $1100. I think you might be able to get $700 to $800 if you include utilities. It depends how nice your place is, the location and if you have a washer and dryer.
Don't get greedy with your prices. Sometimes a roommate's rental income can pay for most of the mortgage depending on where you are.
Also do a background check, credit, eviction and criminal on the person and charge them before they move in. Unless the HOA does it in which case they will charge the person, but they might not do a credit check.
In my area you can't find a small one bedroom for less than $750 (which only includes water) in a so-so area and some people are asking for $600 for a roommate, which is high.
Good insights. Thank you.
I'll be paying for Internet, but they'll have access. The only thing I'd ask them to split is gas/electric (water, trash, sewer is covered in the HOA). The unit does have washer/dryer as well. I live in one of the hottest rental markets in the nation right now. Most of the 1BR/1BA places near me are going for $1000 or so. I'm thinking of setting my price at $850.
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