How to Rent a House by the Room

How to Rent a Room in a House or Rent the Entire House by the Room

Is renting rooms and co-living the future in housing in high rent cities?

This type of living arrangement is not new. According to Wendy Gamber “between one third and one-half of nineteenth-century urban residents either took in boarders or were boarders themselves.”

Boarding houses solved two problems: loneliness when moving to a new place and financial uncertainty. I guess there is nothing new under the sun, we face the same issues today. People are increasingly lonely and unable to afford the high price of housing.

This is happening not only in USA but also in UK and other countries.

If you Google HMO UK, you will find a lot of blogs and youtube videos on how to make money through HMOs ( a house in multiple occupation .)
IN USA, there is a new company called Bangalow. It rents the whole property from the homeowner and then rents the rooms.

The reviews online are not positive but that doesn’t surprise me. The margin is very thin for such a company to exists except in high rent cities.
A similar company closed it’s doors in 2015.

The companies in this co-living space have started to buy properties or team with developers to build rental properties like this co-living space in Washington, D.C.

No doubt, this type of housing has its place and for an owner who already has a property, it may provide a much higher income than the single-family rental.

How much higher?

If you decide to rent by the room, there is a rule of thumb that says that the first two rooms pay your mortgage, the 3rd pays your expenses and the 4th is your profit.

If you just want help with your mortgage, bringing in two roommates will pay your rent and that may be all you want.
It gets a bit more tricky if you want to make a profit.


Two main reasons:

  1. Some cities have a limitation on how many unrelated people can live together. It may be 2 or 4. Some specify the min square footage you need to have per leased space. Check with your local government.
  2. You can make a consistent profit only if you are at full capacity at all times and have more than 4 rooms to rent. 

What research do you need to do if you want to rent by the room?

  • Research local demand. How long are the rooms for rent on the market? An easy way is to call ads and try to find a room.
  • Do you need a license? How many unrelated adults can you rent to.
  • Check prices and calculate your profit.
  • Who will manage the property? Include a management fee if you will be hiring a property manager.
  • Insurance – Make sure tenants get renter’s insurance. Insurance companies have guidelines as to the max number of boarders that are allowed to be in the home renting a room. Each company is different so it pays to check around, I would suggest calling a local insurance broker

How to Post a Room for Rent and Where?

Being successful at renting by the room requires you to be a good matchmaker. When tenants have similar occupations like nurses, they have a similar lifestyle and this makes it easy for them to live together.

Some landlords appoint a house monitor and that person is responsible for approving the new tenants and watching over the house.

Websites where you can advertise your room for rent and do research on demand and availability:

  1. Craigslist – still the best for renting rooms in many locations. Unfortunately, there are a lot of scams. 
  2.– Keep this link because they make it very difficult to find it on their site.
  3. -Free to list and their website comes up on first page when you search in many cities.
  4. – allows you to list a room and prescreen tenants and roommates based on lifestyle preference, pets, smoking etc. It’s a monthly subscription to list and search.
  5.– is more of an apartment search website but you can also list a room. Free to list at this time.
  6.– Their website has real people checking is the listing is real. Free option gives you limited choices.
  8. Facebook Groups  – find a group specifically for room and apartment rentals

Renting a Room in Your House Agreement

Landlords who rent by the room recommend month-to-month agreement (Rentce/RentalForms)
If the tenant is not a good match you have to give them a much shorter notice for non-renewal of lease.

If you are renting a room in your house, give each tenant to sign a separate agreement making them responsible for their share.
This will allow you to screen each tenant and be able to evict each tenant separately.

You can calculate and prorate the rent and utilities based on the square footage of the rooms.

Utilities and maintenance of common areas are usually included in the rent. It’s highly recommended for each room to have a separate lock and the common area to be cleaned professionally.

How to Protect Yourself When Renting a Room?

The best way to do this is to screen the tenants as thoroughly as possible. (TenantScreening/Rentce)
Check their social profile. Call previous landlords and other references.

Additional Considerations

  • Create House Rules and ask everyone to sign them. This should include Guest Policy and Cleaning Schedule if you are not hiring a cleaning company.
  • If you are renting the entire house by the rooms and you are not planning to live there, don’t get involved in the roommate’s conflicts. Follow the lease and the rules. If someone is creating too many issues give them a notice for non-renewal of lease and ask them to leave.

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