Got a spare room that barely gets used? That space could bring in extra income—if you rent it right. More people are turning unused space into side hustle gold. Whether it’s a room, basement, or backyard studio, short-term or long-term, renting out space can make real money. But there’s one thing you need before anything else: a rental agreement.
If you’re not sure where to start, grab a free printable basic rental agreement. It’s the fastest way to protect yourself and your space while keeping things simple and clear. With a good lease, you set the rules from day one—and avoid drama later.
Here’s what you need to know before you hand over the keys.
Why Renting Your Spare Room Is a Smart Move
Turning a spare room into rental income isn’t just for landlords. It’s for anyone with extra space, a clean setup, and the right mindset. Whether you rent by the month or just during big events, it can help cover your mortgage, pay bills, or boost savings.
It’s also flexible. You choose who stays, when, and for how long. You don’t need a massive house or full apartment—just a space someone else needs more than you do.
Before You List: Check Local Rules and Prep the Space
Don’t rush to post your room on a rental site just yet. First, check your city or county’s laws. Some places have short-term rental rules, zoning limits, or tax rules. If you live in an HOA or condo, there might be extra rules, too.
Next, get the room ready. Clean it up, add basic furniture, and make it feel safe and private. Think like a guest. Would you want to stay there? Small touches go a long way.
The Power of a Lease Agreement
Now for the legal stuff. A lease or rental agreement isn’t just paper—it’s protection. It sets the terms of your deal so everyone knows what to expect.
Here’s what a lease can cover:
- Rent amount and due date
- Length of stay
- Security deposit details
- House rules (noise, smoking, guests, etc.)
- Utility use and payments
- Cleaning responsibilities
If something goes wrong or someone breaks the rules, the lease has your back. It also makes you look professional—even if this is your first rental.
Must-Have Clauses in Your Lease
To keep things smooth, make sure your rental agreement includes:
- Names of both parties: You and the renter
- Address and room details: Be specific about what’s included
- Rent and deposit: How much, when it’s due, and how to pay
- Term: Is it monthly, weekly, or fixed-term?
- Rules: Quiet hours, guest limits, shared space use
- Termination terms: How and when the lease ends or gets renewed
The clearer you are, the fewer problems you’ll have.
Setting Boundaries and Expectations
Renting out part of your home means sharing your space. That can be great—or stressful. A strong lease helps, but so does a clear talk upfront.
Set boundaries before move-in. Can guests come over? What about kitchen use? Are pets okay?
It’s your home. You decide the rules. Just be sure to explain them clearly and write them down.
Screen Renters the Smart Way
You don’t need a background check service (though it helps), but you should still ask good questions. Meet in person or video chat before agreeing to anything.
Ask about their job, rental history, and lifestyle. Trust your gut. If something feels off, it’s okay to say no.
You can also ask for references or do a soft credit check. Better safe than sorry.
Collecting Rent and Deposits
Decide how you want to get paid. Cash? App? Bank transfer? Make it simple and consistent.
Ask for the first month’s rent and a deposit before move-in. Keep receipts and track payments. You can use a simple spreadsheet or rental tracking app.
Having a clear payment system avoids late fees, excuses, and confusion.
What to Do When Things Go Wrong
Even with the best setup, things can go sideways. Maybe rent is late. Maybe rules get broken.
Stick to the lease. Talk first, but if issues keep happening, follow your written terms. In most cases, clear communication and a written reminder fix things.
If not, you may need to ask them to leave. The good news? A signed lease makes that process easier—and gives you legal support if things escalate.
Wrapping It Up the Right Way
When the rental ends, walk through the room together. Check for damage, return the deposit (minus any needed fixes), and thank them for staying.
End things on a good note. You never know when you’ll want to rent again—or when a former tenant will send a great referral.
Final Word
Your spare room isn’t just empty space. It’s an income stream waiting to happen. But if you want to rent smart, don’t skip the paperwork.
You’ll save time, avoid stress, and turn your space into steady income—the smart way.
Set your terms. Get it in writing. Then watch your side hustle grow.
