How I Earn Extra Income By Renting Out Extra Space

The following is a guest post by Bryn Wied. Bryn is a stay at home mom whose love of travel and budgeting needs only grew when the kids started coming. You can find more thrifty travel parenting stories, ideas and tips at her blog at http://www.ihavekidswilltravel.com/. Enjoy! 

Landlording on the side can be a quite profitable side gig and another way to add a couple hundred extra dollars to the travel fund. The great part it is it can almost border on passive income, meaning it doesn’t take a lot of extra work or time, especially if you can land yourself a full time boarder position. You get to meet new people, make some money from home, and walk away with a couple of good stories and a few lessons learned along the way.

These days, you don’t need to be a millionaire with an entire house to rent out to become a landlord or to make money renting out to borders. Any extra space you may have, from a house, guest cottage, tent, or even an extra couch, can be up for grabs as a potential to bring in some extra cash.

My husband and I first moved across the country in an RV. After upgrading to an apartment, we weren’t able to sell our camper because we still owed money on it from when we first bought it. So we decided to become “landlords” and rent out our extra space instead! Not only did we immediately start making money off of it, but we have since paid it off and now have a steady stream of side income coming in with little to no work involved.

Attracting Business

Utilizing online resources will probably be the best way to attract business when you are first starting out renting. By all means spread the news through word of mouth, because you never know where networking can lead you. But unless you happen to know someone who is actively looking for a place to rent, there are a handful of great websites that are already set in place to help you start renting as soon and hassle free as possible.

I briefly dabbled in airbnb.com. It was very easy to use, and much easier to protect yourself by collecting information ahead of time, secured payments, etc. I also received quite a few inquiries, although the clientele consisted mainly of occasional vacationers who needed a night or two, so if you are looking for a steady renter you should probably try elsewhere. The key is to under price the competition; I consistently do research for similar finds or even just all finds in my area and underbid them by $5. You wouldn’t believe how much business I have attracted simply by underbidding the competition. The same people who look for alternative housing tend to be the same people who think outside the box and are always on the lookout for a deal.

I also used craigslist.com, and have found the most success for long term renters here. The obvious drawback is Craigslist is sketchy. I only did month to month rentals, nothing shorter so as to attract only people who were going to be there for a while and less likely to bounce without paying. I met potential renters with my husband, never alone, and always in a public place first. It helped that the RV we were renting out was stored in a very active and well maintained RV Resort, so there were always lots of people around and a good security system in place. Do what makes sense for you, but just be smart.

We also found a fair amount of business through local church bulletin listings and newsletters. There were a few people who were in need of housing in-between moves or were looking for a place to stay while they looked for more permanent housing in the area.

Safety

Obviously as a stay at home mom, safety of my daughter is a big deal to me. In our specific situation, we didn’t have anyone staying with us, so it wasn’t as if I was sharing my house with someone. We still did face some issues, like renters not paying on time, and the possibility that someone could show up and literally drive off with our RV in the middle of the night and we would have no idea.

The first safety measure that should be put in place is collect money UP FRONT. I know this sounds like Captain Obvious, but we admit we made this mistake, and unfortunately with a long term renter. It took us 2 months to kick him out, and in the end I still don’t think we were ever fully paid. He was also an incredibly sweet guy, which only made it more awkward. My advice would be to avoid that whole situation and just get paid up front and on time.

A great way to make sure this happens, and another step to have in place to protect yourself, is get something in writing. You don’t have to have a law degree to write up a very functional agreement or contract that will protect you in the case of a misunderstanding down the road. Be sure to include:

• Everyone’s name
• Date
• How long the agreement is valid for
• When rent is due and what sort of fine/termination is allowed should rent not be paid on time
• What your responsibilities as landlords are (who pays utilities? What if something breaks?) and what is the responsibility of the tenant
• Any safety deposits needed and their return time
• Move out date

You can add additional information if needed. The important part is to print it out, and have everyone involved sign and date it. Make sure to make 2 copies, one for you and one for the tenant.

Another good idea if you are renting out a larger space such as a guest house, room or RV is to take pictures of the area before your rent it out. That where there is no confusion as to who is responsible for the stained carpet or the broken mirror.

Live Long and Prosper

Hopefully none of the above scares you away from renting out extra space for supplemental income. As a stay at home mom, I can take care of collecting rent and do nothing else while still earning an extra $300-500 a month consistently for the past year and a half. That’s around $4000 a year of extra income we get to use traveling! If we ever get sick of renting, we can turn around and sell the camper for an extra couple thousand. As a bonus, our current renters have become great friends and now are permanently renting the RV.

***Photo courtesy of http://www.flickr.com/photos/106574022@N04/11415400896/in/