Should you rent out your spare room?

The Denver housing affordability problem is real. New builds are a high priority, but they don’t seem to be a viable option for clearing up the problem in the near future.  According to John Burns Real Estate Consulting, there are about 723,000 homes in Denver that are owner-occupied. Of those 723,000, about 442,000 have a spare bedroom. So, if you’re one of those 442,000 you might be asking yourself if you should rent out your spare room? The extra income sure would be nice. But are there risks?

Before making the decision to rent out your spare room, you want to make sure you’re weighing the benefits with the drawbacks. Further, if you decide to go through with it, you want to be sure to be prepared so you don’t end up regretting the decision.

Get help making a match

There are services out there that can help match you with a potential tenant. There’s a Denver-based company called Silvernest. They primarily match seniors with extra space with seniors who are looking to rent. Further, they help with the contract and background check. You can look into that service more here: https://www.silvernest.com/

Some faith-based and non-profit based matching services are Providence Home Share and Sunshine Homeshare of Colorado. You can look into those here:

https://www.provhomeshare.org/ and http://sunshinehomeshare.org/

Know the Law

Before you become a landlord in your home, be sure to do your research on Colorado laws regarding tenants. You don’t want to find yourself in hot water because you didn’t know the law. There are laws prohibiting you from entering your tenant’s room, even though it’s in your house. There are also laws regarding how much notice you must give your tenant if you’d like to terminate the arrangement. There are even laws allowing the tenant to withhold rent if you don’t keep up your home and their living space. Be informed. You can read more about Colroado tenant laws here:  https://www.nolo.com/legal-encyclopedia/overview-landlord-tenant-laws-colorado.html

Extra Income

Trulia estimates that a one-bedroom apartment in Denver surpassed $1,200/month last year. Contrastly, rooms rented from homeowners last year went for more than $660/month. Using those numbers, the potential additional income for a homeowner could be around $8,000. While that number might sound super appealing, don’t forget that it’s taxable.

At the end of the day, we’re not encouraging you to rent your spare room out nor discouraging you against it. We just want to help provide you with pertinent information so that you can make that decision. And if you decide to go through with it, we want to help you be informed so that it’s a positive experience!