Renting out individual rooms in a home or investment property can be a great way to generate income—especially in cities like Houston, where room rentals are increasingly in demand. But before you start listing a room, it’s important to understand how to do it the right way: legally, competitively, and with clear expectations.
Here’s a quick guide to help you rent out rooms the right way:
✅ Step 1: Understand Local Laws & Regulations
Before you rent out a room, you must ensure your property is zoned for this type of arrangement. In many areas, you can rent out rooms within a single-family home, but if you exceed a certain number of unrelated tenants (often 3–4 in Texas), you may need a special permit or license.
Common Legal Considerations in Texas:
- Rooming house regulations may apply if you’re renting to multiple unrelated people.
- Fair Housing Laws apply—meaning you cannot discriminate based on race, religion, gender, familial status, or disability.
- Health and safety codes must be met. All rooms must have proper ventilation, exits, and access to shared amenities.
- It’s a good idea to check with your city or county for any ordinances that apply to room rentals.
💰 Step 2: Determine a Fair Rental Rate
Setting the right rent is key. You want to remain competitive while covering your expenses.
Here’s how to determine your room rental rate:
- Check the Local Market – Look at platforms like Zillow, Facebook Marketplace, Craigslist, or Roomster to see what similar rooms are going for in your area.
- Factor in What’s Included – Are utilities included? Is the room furnished? Do tenants get access to laundry or a private bathroom? These all affect price.
- Divide the Property’s Value Fairly – If your mortgage and utilities total $2,400 per month and you’re renting 3 rooms, you might start with $800 per room and adjust for size, privacy, and amenities.
- Adjust for Demand – If you’re near a university, medical center, or popular part of town, you can often ask more.
💡 Tip: In Houston, room rentals for furnished spaces with utilities included often range from $700–$1,000 depending on location and condition.
📄 Step 3: Create a Clear Lease or Room Rental Agreement
Don’t just rent on a handshake. Protect yourself and your tenant with a written agreement that includes:
- Rent amount and due date
- Security deposit terms
- House rules (guests, noise, shared space expectations)
- Term length and notice period
- What utilities or services are included
In Texas, it’s legal to rent rooms with or without a lease, but having a written agreement is highly recommended for enforcement and clarity.
🛠 Step 4: Prepare the Room
Make sure the room is clean, functional, and ready to show. You should:
- Provide a working lock on the door
- Ensure access to a bathroom and kitchen
- Include basic furnishings if possible (bed, dresser, nightstand)
- Clean carpets, windows, and common areas
Professional photos and a clean, welcoming space go a long way in attracting reliable tenants.
🔄 Step 5: Screen Tenants Carefully
You have the right to screen tenants, but it must be done fairly.
You can:
- Run a background and credit check (with permission)
- Verify income and employment
- Ask for previous landlord references
Avoid any discriminatory questions that violate Fair Housing laws. Stick to criteria related to payment ability and respect for shared space.
📝 Final Thoughts
Renting out rooms can be a fantastic way to create passive income—but only if you do it the right way. Make sure you understand local regulations, price competitively, and clearly outline expectations in writing.
At AC Management, we help owners across Houston manage long-term rentals, vacation properties, and even room-by-room rentals with confidence and professionalism. Need help getting started or managing tenants? We’ve got your back.
AC Management – Where Everyone is Family.
📞 Contact us today at 832-662-8225
📧 Email: info@theacmanagement.com
🌐 Visit: www.theacmanagement.com