Tag Archives: renting out a room

How To Be Like A Landlord Without Owning Rental Property

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I have a friend at work that has experience what it’s like being a Landlord, even though he doesn’t own rental property.

My friend (let’s call him Phil), has a 4 bedroom house but only 2 kids.  So one year my friend and his wife decided to rent out their extra room.

I believe this is an excellent way to creep into the Landlord/”rental property” owner role.

Here’s why:

  • You don’t take the financial risk of purchasing rental property and trying to make a profit off of it.  If you rent out a room in your house, so you should be able to be profitable each and every month.
  • You don’t have to go through the process of getting a mortgage for the room since you already either have a mortgage or you own your house mortgage free.
  • You still have to deal with collecting monthly rent, but if your tenant misses a payment, it doesn’t hurt as much since you don’t own any extra expense from renting your room out.
  • You draw up a contract between you and your room renter!
  • If you tenant leaves, you are still in great shape financially.
  • You learn to put ads in the paper for renting a room.  This should transfer pretty well to the same process for renting out a rental property.  Plus you get to learn what works and what doesn’t at a low-cost.
  • You get practice running background check!  This should give you experience when you really do take the plunge and buy rental property.

Taking it to the next level, rental property!

Another great thing about renting a room before jumping into the real estate market, is that you can save money from renting out your room, and over a few years you can use that money for a down payment on a rental unit.  This way you reduce the hit on your own personal checking/savings account since the money from renting out your room is money you wouldn’t have had anyway.

Conclusion to Renting a Room

While there are could be some negative to renting out a room in your house, I believe that this reduces that big step from not owning rental real estate to owning it!  I really believe this could make the transition much easier (especially if you are single).

Good Luck,

MR