There are costs associated with renting out a room that cannot be directly billed to the tenant. “Normal wear and tear”, for example, includes some of the following issues:
- Minor stains on the carpet
- Fingerprints on the wall
- Bent tines on a fork
- A permanently clouded glass
- A rust spot in the dishwasher rack
- A stuck window
- A leaky faucet
- A running toilet
- A loose doorknob
You cannot, and should not, bill a tenant for things that just plain wear out. If your tenant kicks a hole in a wall or spills a bottle of calligraphy ink on the carpet, that’s the kind of damage you can bill for. But a dark spot in the middle of the floor because he wears his shoes indoors? Not billable.
People in the United States are assumed to wear shoes indoors. It’s a local custom. So you should be prepared for your tenants to do just that, unless they were raised elsewhere or in a family where wearing socks or slippers indoors was the norm. Even if you personally remove your shoes, don’t expect your tenant to do so.
You should expect to repaint the room at least every three years, or between tenants (depending on the duration of their stay). You should expect to replace carpeting about every five to seven years, depending on how heavily soiled it is. I also expect to go through dishes and kitchen utensils so that I have to buy replacements as they get dropped or broken. No matter who your tenant is, he or she will never care for your belongings better than you do.
You should expect a higher water bill and electric bill as a result of having an extra person in the house. When water is included and the tenant doesn’t have to provide it, the tenant will take longer showers and more of them. When electricity is included, the incentive to turn off lights when leaving the room or to not run the air conditioner at full blast while not in the house is likewise removed. Plan for this and adjust the rent accordingly.
Your tenant’s portion of the water and electric bill is a deductible business expense if you are including utilities with the rental. So, likewise, are materials and labor used to perform repairs… provided it’s someone else’s labor. If you do the work yourself, you cannot bill yourself for services rendered and your hours of work are not tax deductible in any way. If you pay someone else to do the work you can claim it as a business expense.
The last thing you should plan for is extra work. Every adult or medium sized animal you add to a household generates about an hour a day of extra work just to clean up. There will be more dusting, wiping up spills, scrubbing toilet bowls, and removing lint from the dryer filter. The work has to be done by someone, so unless you plan to take it on yourself you should budget to pay to have it done.