by Francis Jock

Created on: October 15, 2008   Last Updated: January 30, 2011

Renting a room in your house automatically implies that you are willing to take on some degree of risk. There's no pleasant way to state the fact that renting that unused bedroom to well-meaning relatives or a stranger can sometimes have an unpleasant outcome. Unless one is careful about following the fundamental business practice called "due diligence", any number of problems with personal safety, security, and money can, arise. The challenge aspiring landlords are faced with is figuring out what can be done to minimize the risk to home and ones family?

The basic challenge to minimizing risk is the innate tendency to trust others. We want to be happy and make some much-needed money to help pay the bills, so a decision is made to rent out the spare bedroom. It isn't difficult to find someone willing to rent the room, and after a short search or a few phone calls to friends and relatives, a potential tenant arrives, bag in hand. This is good for us because we have now rented out the empty room, effectively turning it into a business asset. On the other hand, this may not be quite so good if we didn't bother to run a background, credit, or character reference check on the person anticipating moving into our domain.

The business principle of due diligence requires conducting a background check before a decision is arrived at. That's not to say that every tenant is going to be a buzz-saw killer from a horror movie. Most people are good and can be trusted. Nevertheless, by not having a rental application accompanied by a signed release to conduct a background, reference and credit check, you could be facing an unwanted problem. When it comes to renting a room in your house to a stranger, however, one can't be too trusting, or unwilling to take the time to bother with it.  All of these problems, as large as they may seem at first, disappear as soon as you identify the resources and the process of  conducting a background check. You may need a little help getting started, but help is as close as your nearest apartment owners or landlord's association.

Begin the learning process by contacting either of these associations and inquiring about workshops or seminars they may offer. Another good resource is an attorney that specializes in property management and landlord issues. Check the telephone book and you're sure to find any number of real estate attorneys willing to help. Another good resource is the Internet, and websites like landlordforms.com (http://www.landlordforms.com)

• 1
• 2
• Next Page >>