Renting Out Extra Rooms Can Bring in $$$

Becky Worley explains how renting out your extra room could bring in cash.

ByABC News via logo
May 14, 2009, 8:47 PM

May 15, 2009 — -- As incomes shrink and bills grow, renting out a room in your home seems like a way to make ends meet. Craigslist reports that room rental listings have almost doubled in the last year as people look for ways to convert extra space into extra money.

Ruth and Paul Muto hope to cash in on this trend by renting out the extra bedroom in their Sacramento, Calif., home. The economy has hit the Mutos hard: They've lost about 60 percent of their income this year, they are behind on bills, and they even are worried about losing their home.

"I'm robbing Peter to pay Paul," Paul Muto said. "Somebody doesn't get paid this month, but they get paid the next month and I don't like that."

So, Ruth Muto put an ad on Craigslist and placed a flyer at the local community college.

Craigslist is the main repository for room rentals in all 50 states. Placing an ad entails signing up for a free account and posting a detailed description of the house and room.

If you can, include pictures of the room. List the rough geographic area of the home, but do not include your street address. If you have children in the house, do not include information about their age or gender, but use neutral language to alert prospective renters to a family environment.

Craigslist relays e-mail inquiries to you without revealing your e-mail address, but use common sense when you get e-mail from strangers. Anyone who's out of the country who wants to pay you up front with a Western Union money transfer or who has some other obscure set of circumstances is not a good gamble for a first-time room renter.

Be patient and wait for inquiries that feel right.

But don't exclusively trust your gut, said Leigh Robinson, author of "Landlording."

"Most people who are looking for a roommate are real amateurs," Robinson said. Therefore, you have to do credit checks, call references and go beyond the gut instinct that you get when you first meet someone.

"So many people like the person they are interviewing and neglect to check the application thoroughly," Robinson added. "They find out later the renter couldn't afford to pay the rent."