Let's face it. Your extra bedroom has your middle school yearbooks & a bunch of junk.
How about some money instead of more dust mites?
Here is the process I've used for 20 tenants over 4 years & never have missed a rent payment.
No more searching. Here is your definitive guide.
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*Sample lease agreement
Hey guys, max here. If you are ready for some positive, consistent cashflow, you own a home and are willing to share a little bit. The sharing economy is alive and well. And in this video, I'm going to go over a guide on how to rent out a room in your house right now, your house I've rented it over 20 people successfully.
And by success. I mean, I've never had anybody miss a rent payment ever in four years, 20 people, four years consistent rent payments. I have a system and here I am going to share with you right now. The first thing you ask yourself, are you ready to share me? I'm pretty willing to share. At some point when I have a big mansion, I'm not going to share, but for now, I'm going to share, are you willing to share your restroom, your living space, and maybe saying good morning every morning, those are really important because if you really like your space and hate being interrupted, like me being interrupted all the time, making these videos, you want to double, double check yourself, double think and think.
Do I actually want to live with somebody I've concluded that the cashflow and the money that I earn is worth more than the inconvenience of being interrupted or having to have a conversation with a real human being. The first thing you want to do is create a lease and roommate agreement, two governing documents that you want to have for anybody who ever rent from you, whether they're your best friend, your brother.
Or somebody off Craigslist. Do you want to have these to protect you and to protect them? I had one lady. I had a comment on a YouTube video and she said I never made the paperwork. And it was a complete disaster when they stopped paying and they never helped at all doing anything you want to avoid that you want to make sure you have the governing documents.
So. If you have to go to court, you are ready and you don't want to go to court with a handwritten thing, print it out, make it look nice. So you can be prepared. The lease agreement is the legal thing and the roommate agreement is how the house rules are going to go. And that means no smoking in your room there, buddy.
That's what my role is. However you want these governing documents and I created. Two really easy ones that can be used for your new new roommate, click the link below. And that will give them to you for free. You're going to want to price out your room to figure out whether you're in the right ballpark of what rooms are going for in your area.
Craigslist has been very helpful for me. I remember first time renting out a room. I went on Craigslist and figured out my zip code, my area, the inventory of rooms to figure out what's going on in the market. To figure out your price. Cause that's pretty important. Another way of figuring out is how much is the house you're living in renting for find some comps, comparable houses in your area and figure out, let's say your house rents for a thousand bucks a month.
A thousand dollars divided by two roommates is 500 bucks. There's a pricing issue right there. And then the dreaded utility question. Do you include utilities? Do you add them separate? Personally, because I hate hunting down another payment throughout the month. I just include them. So let's say, or utilities monthly are $150 each month.
Utilities, the normal stuff. Take one 50 divided by two roommates. That's $75 per person. I simply add that 85 for a little, 10, $10 cushion to the rent. So I have a little cushion and the utilities are included. People seem to like that better. I've done both ways. And I seem to have more interest when utilities are included.
Because then there's no. Oh, by the way. And then it cost a hundred dollars this month. There's none of that. Everyone understands exactly how much they're going to pay. Transparency is very important. And then make sure when you're posting this on Craigslist or whatever service you're using, make sure you put utilities included in all caps, household chores.
Have you ever tried to make someone clean the house when they don't want to do it? Yeah, it's impossible. M PA Sibyl ever. I failed and attempted to Institute a short chart years ago between two people. And it just was never done ever, ever, ever. So I stopped doing that and instead I just charged $30 a month per person, and I become your housemate.
How about that? You can become your housemate. It's really simple. If you have a small restroom and a small kitchen, that's pretty much the only thing I claim. It doesn't take very long at all, but if you charge them a 30 bucks as a cleaning fee, everyone understands the place is going to be clean. And it gives me a little time to decompress and kill all that bacteria in my bathroom.
I'm already going to claim it. So might as well just have a little extra Dingle. All right. Now on the nitty gritty, creating your room ad, I have probably. Revised mine 10 to 15 times because I realized very important things were not, none of that should be in there. I have a very, very Bulletproof advertisement template that you can get at the link below, click on your link, put your email and I'll email it to you.
And there are some very important things in there. So don't spend hours and hours and hours. Figuring out how to do it, email me, or put your email in and I'll email it to you. I friend has over 20 roommates over the last few years, and there are certain words and phrases you want to put in there because if you don't, you will have many, many dozens of phone calls from people who just get out of prison, smoke cigarettes in your room, just the craziest crap.
Have no money, want to live them for free. It's just, I've heard the craziest crap from these voicemails. I wish I'd saved them all to laugh. But you want to make sure you have the right word verbiage there to make sure the right person is, are pointing to your advertisement. The last thing you want is 30 phone calls of complete, not the right person.
And then I put my phone number on there for calls only phone calls only, no texting, no email. There are too many scams. There are too many period. You will be, you will be sending money to the Nigerian Prince. The third person, third cousin removed just the craziest crap. So put your phone number so they can actually call you not text and no email.
And what's great about sideline or Google voice is I use both of those services. So I don't actually have to put my true phone number, my real phone number. The only people will know my real phone number are my family. Everybody else. Has a business number that goes on, do not disturb at a certain time.
So you can manipulate that. So you don't have phone calls from people wanting to rent from you at 10:00 PM. That'd be a little odd. I phoned interview every single person and I, they list of questions that are very direct, very simple at the link below again, put your email in and I'll email it to you.
Don't spend. Hours and hours trying to figure out a question list. I had this list I've used on gosh, probably a hundred people, a hundred, and that weeds out people you don't want very quickly. Very, very quickly. My time is very valuable. Your time is very valuable as well. You want to waste your time on things you want to waste your time on, not on people calling and trying to live at your place for free.
Yes, I've had that happen before. This one's easier for me because I'm already pretty upbeat and assertive, but ask direct questions. How much money do you make a month? What are your other bills? What's your rent right now? Why are you leaving the current place? These are very important questions. And if they give you long stories about this, that, and the other, I would second guess renting them a room and every single dealing plant a seed of urgency.
Not because you're trying to deceive them, but because reality is, do you want to rent this room as quickly as possible period? You don't want somebody. Spending weeks and weeks to think about it because the more you think about something, the more you don't make a decision ever. So urgency, I always say I've had probably 10 calls today on this.
I'm super excited to rent this room out, man. It's incredible. It's something that's simple plants, the seed of urgency in their mind, so they know. Hmm. I need to make a decision on this. Now, not later out of 20 roommates over the last few years, I've only had one, one believe and come back to sign the lease.
The other 19 have signed the lease right then and there to click to make sure their spot is secured. The urgency is super important. Be upbeat, positive, and direct. Always, always always know, be negative. Nobody wants negativity. People want to have those around them being positive. So make sure you're upbeat and assertive do not be passive.
Ask them direct questions about their personal life and what they're doing with life and what they've done. Those are all really important to figure out what is going to happen in the future. If you think they're going to be the right fit. Awesome. Congratulations. Meet them. I've done both. Coffee shop meeting, and then going to the house or directly to the house.
Use your best judgment. If you feel uncomfortable meeting someone of your house, they're probably not the right person for your house. Period. I always send via Adobe sign, the lease agreement and the roommate agreement before even meeting with them so they can look it over and then have any questions. I can answer them right then and there when I'm meeting them, confirm, confirm, confirm the meeting every single time I one time spend an hour.
Waiting for somebody. And I know an hour, isn't a long time in the grand scheme of things, but I spend an hour sitting and doing nothing that it could have been doing something. So confirm the meeting, have them text you when they are driving to the place and make sure they confirm it. If there's no confirmation, there's no meeting, it's not happening.
You want to make sure this person can follow through, at least on the tiniest things like confirming meetings and being there on time. If they can't do that. Your rent is probably not going to be on time. And then obviously show them the room, show them the common area. Let's go over a little bit of the rules, the washing machine, the quiet hour, just things.
Very, very basic things. Make sure the room is very pristine and turn on every single light in the house. I don't care if it's just for one beautiful painting on the wall. Turn on every single light, light, illuminates, and light actually makes things look a lot nicer. Not because you wanted to see, but because you want to show in your best light, it's like going on a first date.
You want to make sure you're not cut to hell from shaving. Like I am right now. And you are looking your best answer, any questions they may have, they may ask, you know, what about this? What about that answer directly? And to answer bluntly, don't beat around the Bush. If the washing machine is broken, say it's broken, I'm going to fix the next few days.
So there'll be ready before you move them. Just be direct with people, transparency and direct, direct. Communication is so I don't know. It seems old fashioned. Why, why would you want to not know things? I want to know things immediately. Give me the things I want to know about and your tenants will very much appreciate that if they are not a good fit, no big deal at all.
Be cordial, be respectful, simply say, okay, I'm going to think about it. I have a lot of, a lot of things to think about in the next few days. I'll let you know what happens and actually follow up with them. Do not leave them hanging. I've had a guy tell me out of 20 phone calls. I was the only one to actually pick up and then follow up with them.
Follow up with the people, put yourself in their shoes. Ask if I went to go look at a house and I think I have a place to move in and I don't hear from anything. It's just. Be respectful, be courteous, reach out to them and simply say, I ended up going to somebody else all the best in your search, sort short, simple, sweet.
Be done with it. Do not leave them hanging if they are a good fit though. Again, seed of urgency. Remind them how many people have called how many people you've already showed the room to things of that nature. Because the last thing you want is the right person to walk out the door, simply because you could not close them on the sale.
Yes, you are selling you 100% or selling that you are going to be a great landlord, and this is a great space for them to live. So plant the seed of urgency and always, always explain to them why you think that the best fit, compliment them. Explain to them. Why you guys are going to mesh well together, personality wise, make sure they know that you want them.
Cause you already know that they want you. That's a fact you have the power and make sure to show them that you're extending the olive branch. That you're the right person for me. And like I said, I'd have 20 people. I've only had one person leave and come back and sign. So if they're the right person do not let them leave.
Okay. Doesn't mean do anything illegal obviously, but convince them, sell them on the idea that this is the right place for them. If so you already have, here's what, here's why I suddenly Adobe signed first because now they already have the documents to sign. Right. Then it's super simple. You just say, okay, great money, check money, order, whatever the transaction of.
Of consideration is, which is a fancy word for money, the consideration, and do the Adobe sign. Both parties get a copy and you're good. Signed, sealed, delivered, give them their key or their door code. I use door codes cause it makes it a hell of a lot easier when people move out. And that's that and make sure to do something nice for them.
When they first move in, have a pizza night, have a football slash whatever they enjoy night and humanized the relationship. Because the last thing you want things to do is just simply transactional. I've had tenants or roommates who are just transactional and it's not pleasant. Do you want to actually have a relationship with these people?
Whether it be a small one, a extensive one, you just want to have some type of relationship, as opposed to just the first of the month the rent is now. At least that's my take. I like having, at least if they're living in my house, I want to make sure I know them well enough that we're good buds or at least just cordial.
All right. That is the guy, man. You have so many good resources. Make sure to put your email in and you're going to have the roommate agreement, the lease agreement, the questions to ask. Uh, yeah, that's pretty much it, man. You're there you are there. Congratulations. Any questions, please comment below. I'm happy to assist you with that and happy renting and make sure to choose the right person.
No pressure though. I'll see you guys next time.