Roomate Screanings and Utilies Cost

[Cara Simpson]

Hello! My name is Cara I am new to Bigger Pockets. I have just recently purchased my first two properties. One I just finished remodeling and will be living in and the other I am just starting to remodel to turn into a rental property. 

I plan on renting out one or two of the spare bedrooms in my house to provide a little extra income and to have someone else pay for the mortgage. Do you suggest using the exact same "rental screenings" that I have seen on this site for to use as a "roommate" application? Also how would you suggest splitting up the utilities? I was planning on having them included in the rental price, but I am worried about over usage. Is it safer to have them split utility costs so that they have a reason to be energy conscious? My worry is trying to get that "extra" money every month. Or should I just increase the rental cost to allow for a buffer for utilities?

I am new to this so any suggestions or advise would be appreciated!

[Alexander Merritt]

I agree with @Benjamin Timmins however I wouldn't use the exact same screening criteria. You should use the same screening criteria as far as finances and criminal record goes, but as far as personality goes that should be more in line with your personal expectations. For your rental you might have a great tenant that pays on time and doesn't cause you any problems but then again you might not want to personally live with that person for one reason or another.

I did the exact same thing you are doing now and rented out spare bedrooms in my house. Personally I wanted to split utilities so that there was not "abuse" of utilities. However, this made more work for myself as I had to get all the bills, divide them up, get the extra money from them, etc.... For the first year I would have them split utilities. You'll use that first year as a baseline to determine how much your utility bills will be. Then next year you'll have the data available to decide if you want to continue splitting utilities, or just lump it into the rent.

Also, I found that doing all of my "land lord" duties for my roommates wasn't the best for the personal relationship. There was no ill will or fights or anything like that, but I found that my roommates view me in more of that land lord role, rather than a friend role. I think that was mainly because they knew I owned the home, rather than just another roomate who happened to be the one do divide up the bills to pay some other land lord. So most of the time we just did our own separate things and every once in a while we would do something together like have a party at the house. Financially though, it was one of the best moves of my life.

Hope this helps and good luck!