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How To Rent Out Spare Rooms To Cover Mortgage

Owning a home is not cheap. If you have spare rooms, consider renting them out! This guide lists step by step on how to find, screen, and manage tenants!

Jerry Zhang
Jerry Zhang

6 min read

Owning a home is not cheap. Especially after making the down payment and paying the closing costs, there are still up to 30 years of monthly mortgage payments to make. Not to mention that you probably just emptied your reserves with the huge chunk of cash just spent on the down payment for the home.

Towards the end of 2018, I ended up buying a townhouse. Living in Southern California, the monthly mortgage payment is not a small amount of money. Since I am unmarried, I really only needed 1 room to myself. I can rent out the other rooms to tenants who can help subsidize (or even fully cover) my monthly mortgage payments.

Room rentals work pretty well because each room costs less than a studio or a 1 bedroom apartment, so there will always be demand.

Finding Tenants

In order to find potential tenants, you will need to do some outreach and marketing. Here are some ways that you can start your search.

Referrals From Friends and Family

Got any friends or family who need an extra room? Do they have friends who need an extra room? Do their friends have any friends who need an extra room? You know how it goes. Keep digging into that network of yours to see if anybody happens to need a room.

One thing to be careful about renting to friends or family is to be clear that while they can still be a close friend, you are also their landlord and won’t be giving them any preferential treatment. Rent still needs to come in on time, and the contract still needs to be respected.


I have found the majority of my tenants through Craigslist. All it takes are some decent pictures and a solid description, and people will start reaching out if they like that they see. I’ll write a separate blog post to cover how to create an effective Craigslist Ad.

Social Media

Besides your personal network and Craigslist, you can also take to social media to let your network know that you have available rooms. Your mileage will vary depending on which social network and the following on each—I would simply make a post and ask those interested to directly message you.

Yes, even in this day and age, print ads still do exist. Don’t forget to include your contact information if you go this route. Here are some places that you can place them:

  • The local newspaper in the classified section
  • Local small businesses that have pin boards

Screening for the Right Tenants

Now that you have found a pool of interested candidates, how do you choose the right one? Keep in mind that these people will be living on your property, and choosing the wrong tenant could mean property damage or worse.

Meet Them In Person

If this is an option, I highly recommend meeting them in person. The best way to do this is to give them a tour!

This usually only takes 15 minutes, where they drop by your place to see things in person and you get to know them a little better in person. After they arrive, use this time to identify any red flags with the way that they behave and how they act around your home. If they speak in a condescending tone or slam the door really hard, you probably don’t want them in your home.

Ask them a couple of questions. What will their schedules look like? How they will spend their time at home? It doesn’t have to be anything like a formal interview—just make sure that they will fit into your home without causing any disruptions.


As a baseline, you need to know that they are who they say they are. After they are ready to move forward, ask for a Driver’s License and/or a Passport and make a photocopy so you can keep it for your records. If they are unable to produce these documents, it’s best to not get involved with them.

Proof of Income

Can they afford to rent the room? If not, they should probably look for other options. I will require that their income is at least 2x the amount of rent, but preferably 3x or more. Examples of documents can include:

  • Job Offer Letter
  • Employer PayStub
  • W2
  • 1099


I recommend asking for at least 2 references–other people that can personally vouch for them. Ideally one of those references should be from a former landlord. A simple call can easily rule out potentially bad tenants.

Credit/Background Check

Depending on how formal you want to make the rental process, you can also run a credit and/or background check on them. There will be a fee, and you would need to ask for their social security number.

Since I’m still personally managing the property myself and am onsite, I have chosen to forgo this step. Things have been working out so far. But if I start to encounter problems in the future, I will add this step into my application process.

Structuring the Rental Agreement

After funneling down to the tenant of choice, now it’s time to define a contract. In general, I like to keep things simple so it’s easy on both parties.

Include Everything in the Monthly Rent

To keep things simple, I will include all the utility and internet bills within the monthly rent. That way, I don’t have to tell each tenant how much of the bill’s portion they need to pay every single month. Not to mention that every utility will give their bills and due dates on different days. Coordinating this would be a logistical nightmare.

As long as my tenants aren’t blowing up my utility bills, I am okay with the simplicity.

6 Month Lease and Month-to-Month Afterwards

6 months provides a good balance between the landlord not having to search for a new tenant every month while providing the tenant enough flexibility to move out.

It’s important to provide attractive terms for your tenants in order to retain them. Keep in mind that room renters are typically not looking for a permanent solution—they usually want a cheaper place to rent before they are ready to have their own place.

In my experience, if the tenants are happy with their living situation, they will stay far past the original 6 months, and will continue to stay because of the flexibility.

Security Deposit of 1 Months Rent

In the interest of protecting your investment, you will need some insurance from your tenants in case something happens during their tenancy. This is your way of discouraging causing damage on your property. If they want their full security deposit back, they will need to take care of your home.

I also require a 30-day notice from the tenant if they want their full security deposit back. If I get a shorter notice, I will prorate their returned security deposit after damages.

If you are taking in a couple for a room, I recommend doubling the security deposit since there are 2 people to account for.

Guest Policy: Case by Case Basis

By default, I do not allow guests. This is not their place, and I have the right to know who comes into my home at all times.

If the tenant has a good track record and gives me sufficient notice, I might be willing to approve their guest visit.

Quiet Hours

For the respect of other members in the home and the neighbors, I set my quiet hours from 10pm to 6am everyday. We all have work or school the next day, so we all deserve to sleep in peace.

No Pets

Unless you have prior experience with pet ownership, I strongly recommend against allowing pets. While pets may be cuddly and cute, they can be monsters when it comes to maintaining a home.

If a dog pees on your carpet, that stink will remain until you get a carpet cleaner to wash it off. If a cat decides to scratch your couch, your precious expensive furniture just lost a lot of value.

You get the idea. Reject all pets, unless you really know what you’re getting yourself into.

Some Small Extras

Typically, I will buy some household items in bulk to save money on per-item cost. I’ll also allow my tenants to use these items too so they can save some money and space. Here are some examples:

  • Toilet paper
  • Paper towels
  • Hand soap
  • Dish soap
  • Laundry detergent

Managing Tenants

If you’ve made it this far, congratulations on becoming a landlord! Now, it’s time to retain your tenants by keeping them happy.

Earn Their Trust

Trust is hard earned and easily lost.

Make sure to keep your tenants informed on all things that affect them. Don’t try to hide anything from them just because you are afraid of how they will react. As long as you ensure them you are working on it and take swift action, they will learn that they are in good hands.

Enforce On Time Rent Payments

This is extremely important. Do not let your tenants think that it’s okay to make a payment a few days late. This can quickly lead to a downwards spiral with frustrations from both sides. Make this clear upfront.

I make no exceptions for this rule—if a payment is late, late fees will be charged.

Check In With Them Once In Awhile

Make sure to take good care of your tenants. After all, they have chosen your home instead of somebody else’s home. Treat them like your customers. Every day that they continue to stay is equivalent to repeat business.

Show Hospitality

Finally, be a good host. They are on their journey in life and you have the honor to be a part of that journey.

You never know—if they had a positive experience, they might refer future tenants over to you. The reverse is easily true.

Do you also rent out your rooms? Are you thinking of giving it a try? What else would you like me to write about? Comment below! As always, more content coming out soon!

Personal FinanceReal Estate

Jerry Zhang

Programmer, YouTuber, and amateur musician. I like to write too!