What to watch out for when renting out part of a house?

Owning your own house is not just a great convenience. It also gives you the option of renting out part of its floor area to another person. Such an arrangement can be financially very rewarding, but it also involves certain problems. Do the profits outweigh the losses? Definitely – provided that we approach the subject sensibly!

The entrance to the house

The problems begin at the most basic level: is it possible to share a single entrance, or will an additional one be needed? A lot depends on the architecture of the building and, of course, on the level of trust in the people renting part of the house.

In practice, the optimal solution is when the entrances to both the owner's part and the rented part of the house lead directly off the hallway – so that neither side intrudes on the other's privacy or has to walk through "someone else's" rooms.

In houses with an upper floor there is also another solution: stairs leading directly to the upper floor. This, however, involves the cost of building them. What is more, such stairs need to be roofed over (which will matter when it snows), and renovation work will be necessary upstairs to create the entrance.

A shared house, a separate bathroom

Clearly separating the space within the house is not everything. Sometimes, because of the existing layout of the house, certain rooms will remain shared one way or another. We are talking here primarily about the kitchen and the bathroom. If the ground floor and the upper floor of a shared house each have their own rooms of this kind, the matter is simple.

But what should you do when there is a bathroom or kitchen on only one floor? You can consider whether it would be worthwhile to invest in renovation and create an equivalent room on the other floor. Should this prove impossible, it will be necessary to settle such matters as how duties, for example cleaning these rooms, will be divided. Unfortunately, you also have to reckon with the fact that there may be problems with putting this arrangement into practice.

How much does it cost to rent out part of a house?

This is not the easiest question to answer. While it is easy to set the rent itself, it is harder to estimate what the cost of the utilities used by the tenants will be. Trying to estimate this "by eye" and simply rounding up the rent can be quite difficult and unreliable.

The best thing you can do is, of course, to install separate water or gas meters. Unfortunately, where the kitchen and bathroom are shared, this will change nothing. All the more reason, if we decide to rent out part of a house, to invest in remodelling it beforehand.

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Who pays for renovations?

Dividing costs when only part of a house is rented out is not just a matter of utility charges. It also concerns expenses related to renovation. And this is not about renovating the rented rooms, but about work on the building as a whole, such as insulating the walls or repainting the facade.

In theory, such matters can be settled as they arise, but in practice it is worth considering whether to include them in the wording of the lease agreement. In that case, however, you must reckon with the need to set a certain schedule stating when this kind of work will be carried out and what the tenant's contribution will be.

Alternatively, such costs can simply be included in the rent, which seems the simplest solution.

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Shared duties of the landlord and the tenant

We have already mentioned a possible division of duties where a kitchen or bathroom is shared. Unfortunately, even where these rooms are separate, there are still some areas in which agreement must be reached.

One of the "shared matters" should be clearing snow in winter. It is worth defining the extent to which the parties will share this duty, although, unfortunately, putting it in the agreement may be difficult and you will probably have to rely on a gentlemen's agreement.

There is one more problem. The agreement should state whether pets may be kept in the rented part of the house and whether smoking is allowed in the shared area. Even if you spend quite a short time in the corridor leading to the individual parts of the building, this will be extremely important to non-smokers. If such matters are important to the owner of the building, they should be put in the agreement in writing. As should any other topics that raise doubts.