Your guide to renting out a room

Before you start advertising for housemates, it’s worth checking regulations with the rental authority in your state or territory. Some things they could help you understand may include:

• The rights of both landlords and tenants
• How to meet the minimum living standards set by your rental authority
• Rules for increasing rent
• Regulations around bond payments
• Guidelines on ending tenancies.

Unsure where to go for your state or territory’s rental authority? Find out more about your rights and responsibilities as a property owner where you live.

To ensure you’re getting a good return on your room, consider researching rent prices in your area. This can help give you a guide on how much to charge for rent when you’re negotiating with a tenant.

It’s important to prepare your spare room so it meets the living standards set by your rental authority. This could include:

• Moving non-essential items out of the room
• Fixing broken light bulbs
• Putting curtains or blinds on windows
• Ensuring there aren’t any hazards in the room
• Other general maintenance.

Once your room is ready, you can advertise it on flatmate websites or social media.

Interviewing potential roommates could help you determine if they’re a good fit for your household. Since you’ll be living with this person, it’s worth asking them the following questions about their lifestyle:

• If they have any pets
• Their work schedule and arrangements (e.g. if they work from home)
• If they smoke or drink regularly
• What their hobbies are
• How often they have friends over.

Ultimately, there are many different questions you could ask potential roommates to get to know them better. Consider what you’ll need to know about your roommate to feel comfortable living with them and be sure to answer any of their questions about you as well – it’s a two way street after all!

Signing a written lease agreement can help outline the obligations and any agreed terms you have with your housemate. Depending on the state or territory you live in and the nature of the arrangement, there may be specific forms or template agreements that are available for you to use. For example, in Queensland, the Residential Tenancy Authority encourages the use of a Rooming Accommodation Agreement (Form R18).¹

If you’re going to open your home to another person, you’ll want to ensure they’re trustworthy. After you interview your potential housemate, call any references they provide to get more information on their rental history.

It’s best to lay down a few house rules with any new housemate before they move in. Your house rules may cover things like:

• Cleaning duties
• Chores
• Fridge space
• Use of living space and common areas
• Having guests over.

Check your policy’s Product Disclosure Statement (PDS) for inclusions and exclusions related to renting or call your insurer directly to check out what changes you may need to make to your policy. Chance are you’ll need landlord insurance to cover tenant-related incidents.

To understand the implications renting your spare room could have with the Australian Taxation Office (ATO), always consult with a tax professional. They could also help you determine if you’re eligible for any tax deductions.

• Don’t settle for just any property. Work out exactly what you want, not only in the property but also in the type of housemate you want to live with. This will save you time by narrowing down your options.
• Do a thorough inspection of your room and premises. You should ask to view any properties you’re interested in to make sure they match what’s advertised online. If the person who’s advertising the listing denies your request for an inspection beforehand, it could be a scam.
• Keep records of every transaction. To avoid payment disputes, you should keep a record of all your transactions and receipts for rent, bills, bond or other deposits. That way, you can always prove you’ve made your due contribution.
• Consider contents insurance. If you live in a share house or flat, you can cover your own belongings with contents insurance. Just make sure to read the relevant PDS to better understand any conditions of your cover.

Not all these will be applicable to your situation, but here are some questions you may want to ask if you’re moving into a room:

• How much is the rent and bond payment?
• How long is the lease?
• Does the rent payment include other expenses, such as utilities?
• Are there any house rules I should be aware of?
• Are pets allowed?

A typical home and contents insurance policy won’t cover damage to your property or belongings caused by a person you’re renting a room to. To cover theft or malicious damages by your tenants, you’ll need to purchase a landlord insurance policy.

Tenants living in a share house don’t need to purchase building insurance, but they can purchase renters insurance to cover their possessions. This type of home insurance can cover household items if they’re stolen or damaged from insured events like fires, storms and vandalism.