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) have a variety of free forms and informative articles. You can download everything from rental applications to background consent forms quickly and easily. If you need some extra help, you can check the newspapers for a property manager with a reputation for keeping a good tenant-landlord relationship. They will be glad to help you out, as they are always looking for referrals and testimonials to help them keep their units occupied, just like you.
Minimizing the risk to your room rental business is an important step in providing some degree of assurance that your new tenant will be a good tenant. While the paper work might seem troublesome, you should look at it as if you were buying an insurance policy, which is exactly what you are doing. Be sure to take the time to collect a properly filled out and signed rental application form, background and credit check consent form, and reference check form. The next step is to complete all the checks before allowing the prospective tenant to set up housekeeping. Once you have all the information you need, you will feel much more secure and are far less likely to have problems.
Due diligence is a good business practice for anyone thinking about renting out a room in their house. Like all good business practices, it takes a bit of discipline and effort; on the other hand, you should consider it as an insurance policy that is nice to have, but not necessary to use unless you have to. You are far more likely to avoid unnecessary repairs, unwelcome guests, lost rent, and a host of other problems common to many landlords if you take the small amount time necessary to conduct a thorough background check of potential renters.