Will signing a room rental agreement feel like moving home?

room rental bedroomBEFORE RENTING A ROOM……

 

Signing a room rental agreement could feel like you are moving in with your parents but it could be worse, you could be moving in with Sheldon Cooper.

Although renting a room is a great way to save money in the budget it also comes with pros and cons but it’s best to do your homework first before signing on the dotted line.

Not all families or couples are the same so like the homeowner who may interview you to see if you are the right fit to move in you want to do the same.

If you are someone who likes to live in clean, quiet environment then search out rooms for rent that fit that description.

If you don’t mind kids and pets you can easily find a room for rent because lots of families are looking to supplement their income if they have a spare room in the house. Kids are costly after all.

Today I have a fan question that came in that I was easily able to answer since I’ve been in his shoes before. I’m happy when the fans do their homework because not only are they saving themselves potential heartache they may learn what they are searching for isn’t right for them.

Dear Mr. CBB,

As a single working guy, renting an apartment just seems like a waste of my money and buying a house at this time is simply too expensive for me. I was looking online for places to rent a room and before I sign a room rental agreement I wanted to get feedback from someone who has lived through the experience.

My goal is to save money so I can eventually be able to put a down-payment on a house before I’m 28 but in the meantime I need to pay back my student loans and have one more year left before my vehicle is paid in full. I know you have previously rented a room from reading your blog and bought a house at a very young age which was very inspiring to me.

What were your experiences good and bad, because it feels like I’d be moving back in with mom and dad?

Thanks,

Chris

Questions like this are not uncommon because many younger adults want to get on top of their finances so they aren’t burdened with thousands of dollars of debt before they get married or hoping to purchase their first home.

I’m hoping I can shed some light for Chris before he signs that room rental agreement with my past experiences.

 

Hi Chris,

Thanks for the question Chris. Renting a room wasn’t such a hard choice for us because saving money was the driving force behind our decision. I know I’ve talked about renting is dead money but it’s more for houses for rent, but when you can rent a room for cheaper than anything else, it can be a stepping stone to saving for something bigger.

 

Finding a room rental

 

When we were looking for a short-term room rental together we found that renting an apartment would have been one and a half times more than renting a room in a house plus we would have still been subject to bills that needed paying. Add in the cost to park vehicles and that price far surpassed the cost of a room rental.

We were lucky enough to get a basement room which meant we had our privacy and own bathroom which was a bonus. The kitchen was communal and so was the laundry but the only bills we had were rent, food and our vehicles.

Before we signed the room rental agreement though we made sure to get a tour of the house, ask questions and find out more about the potential family we were moving in with.

I can’t stress this to you enough because you have to live with them and if you can’t tolerate the way they live your experience will be horrifying at best. If you think you may feel like you are moving in with your parents then this is the part where you need to put some focus on then.

 

Room rental pros and cons

 

The bonus of renting a room is that your responsibilities are at an absolutely minimal amount leaving you to pursue other avenues in life. You can work two jobs or extra hours at your current position, go back to school and travel during the weekend, just no surprise parties.

We helped out around the house sometimes not for rent reductions but just out of courtesy although this diminished the less they cared about us being underneath them. Then again your landlord might not want you rumbling around their house cleaning so this could be something you ask them first about before you do it. Remember it’s their house not yours, so keeping things clean and tidy is necessary more than if you were living on your own.

If you want to eat popcorn in your underwear and a balaclava while watching the big game on the big TV then getting your own apartment may be your best choice. You never know who will walk in your room unexpected or knock on your door. Trust me, I know from experience.

Being quirky or at least having odd behaviour or habits could reduce your potential landlords. The quirkiness doesn’t have to be you, it could be the landlord.

Your choice will be based on what you want from your room rental. If you’re only looking to crash there at night because you work long hours then you may want to ask questions about noise, kids etc. If you drive a car, do they have adequate parking?

We were lucky to park two vehicles without any extra costs but this did not come without troubles. At the best of times it was a pain in the butt and we also had an incident where one vehicle was hit by the homeowner because of lack of space. Trying to squeeze in too many vehicles can be costly if accidents happen.

If you take the bus make sure there is a bus stop in walking distance and look into the bus route to make sure it jives with your work schedule or other adventures.

Some people rent a room based on the fact that they live in one city but work in another. To cut down on car costs and fuel consumption it’s sometimes easier and cheaper to rent a room so you live there during the work week and then travel back home on the weekend.

You may want to ask questions before you set up a visit or interview with the landlord/home owner to narrow down prospective room rentals beforehand thus eliminating wasted time. Are you going to get receipts if you request them?

Some people rent out rooms for cash only which will involve absolutely no receipts so if you need room rental receipts look elsewhere. You can only claim a tax rebate on your rent if your income was under $21,625 as an individual under the age of 65 as of this tax year (2013).

The good side for us was we were both able to go back to school and cheap rent meant we could also save money at the same time. After graduating two incomes soon led to us packing away a substantial down payment on a house.

Like I said, our driving force was the saving factor. We put up with horrendous parking problems and kids, heating and cooling that we weren’t able to control so we were cooking or freezing until the home owners came back home. We learned the hard way about the room rental world but hopefully you can learn what not to do from our experiences.

You learn to deal with certain situations, suck it up and hold your tongue. If the situation deteriorates to a certain point where you can’t stand the sight of each other than the roommates agreement verbal or written may have to come to an end.

 

Room rental insurance

 

As per most rental agreements you will more than likely have to pay first and last months’ rent ahead of time. Remember that there is no insurance covering you or your contents in the event something should happen.

What we did was search Kanetix Canada to find free insurance comparison quotes but only after we moved into our home. You can search for tenants’ insurance quotes as well.

We had items missing from our room because there was no lock on the door but there should have been. When the kids have random friends over and you aren’t in your room you don’t know who is going through your stuff and you might be hard-pressed to find out who stole from you.

If the homeowners house happens to catch fire then their insurance will cover their own belongings. You will have nothing covered under insurance unless you are listed under the landlord’s policy, which is highly unlikely or you get yourself renters insurance.

 

Room rental in our home

 

We rented out one of our rooms as volunteers to students for a government exchange company over the summer months once, although a great experience we probably won’t be doing it again.

The tax-free money was put towards paying down the mortgage but the experience was not what we expected. It’s different when the tables are turned and you are the homeowner. You also have to remember that you may have a different set of values as a homeowner than the person you were renting a room with before you buy your first home.

Having to deal with a roommate who is not clean and says they is difficult and having to tell them over and over to do things is hard. It’s also difficult to deal with whether you can trust someone in your house when you are not home. We put a lock on our bedroom door for this reason but it’s still a big chance a homeowner is taking.

The homeowner can ask for a police check on the roommate before having them sign the rental agreement but at the same time nothing is for certain. If you are getting to sign a room rental agreement you don’t know the past of your landlord and what their personality is like until you get to know them better.

One friend of ours had a landlord who went through her stuff when she wasn’t home and was texting her about throwing food away that was in the refrigerator that she bought because she didn’t like the sight of meat.

She also is not providing rent receipts and is not pleasant to live with. She eats out because she doesn’t want to use her kitchen. She should have done more homework before moving in with this woman who says she is renting rooms to pay down debt.

She is renting for cash and currently building more rooms in her basement to add to her rental ship. For many renters that doesn’t seem like a big deal but it may be to you as a renter so think twice before you sign that room rental agreement. Needless to say she’s moving out.

We like our privacy and since we’ve paid off our mortgage we are not in any need to rent out rooms. All in all, we still made the right decision and just put up with the inconveniences to get to where we wanted to go.

No matter what your reason for wanting a room rental instead of renting an apartment it’s still going to be what you consider home if only for a short-term, so make sure you’re comfortable with your choice.

What other tips can you offer to Chris before he signs a room rental agreement?

 

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Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
Mr. CBB

Comments

  1. I don’t mean to whore out my blog but I wrote an article that you (the inquirer) would find useful: http://firstquarterfinance.com/room-off-craigslist/

    It’s about how I found a great room for $275 all included. Now I’ve never rented a room out but I’ve found a few places with great success.

    Mr. CBB,

    Good call about the potential value differences! Everyone has to get along well. It’s scary how many people said I could move in with them after only knowing me for 20 minutes…
    Will recently posted…How to Avoid a Financial HangoverMy Profile

  2. Christine Weadick says:

    We rented the upstairs of a house back when we were first married. We didn’t have our own door and for the first while we shared the bathroom until the landlord could put one in downstairs for them to use. Right after we moved in we came home to find the landlord and his sister had re-arranged the kitchen for us. Granted they thought we might like looking out the window while we ate but it put the table a lot closer to the oven than was comfortable. We moved things back as soon as we found out. He got the hint and left things alone after that. We had to shovel our portion of the driveway, a bit of a challenge as he shoveled his share over our way so we had to move that too. We saved and moved out into our first house as fast as we could…..
    If I had to do this again I would want my own entrance, and such as I really would prefer my privacy Thank you…..

  3. I once rented out a solarium from a girl a few years older than me. It worked out perfectly – she worked nights and I worked days, so I had the whole place to myself most of the time. I only used the solarium to sleep. Not everyone would be able to live in a room the size of a closet, but boy did I save myself a nice wad of cash.
    Candice @ The Let’s Go Ladies recently posted…Chichen Itza’s Temple of Kukulcan: Conversing with the gods themselvesMy Profile

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