Thirteen million spare bedrooms

Census data suggests there could be as many as thirteen million spare bedrooms across the country, and rising living costs are prompting homeowners to consider renting them out.

Check with an accountant first

Kate McCallum, a former financial adviser based in Melbourne, recommends people do the real numbers with an accountant or tax agent before renting out a room.

Costs and tax implications

Water, power and internet bills will rise, and wear and tear on the property must be factored in. Rent is taxable income, which can impact Centrelink payments and capital gains tax exemption.

“Your water, power and internet bills will rise, and then there's wear and tear on your property [to factor in].”

Five things to check before renting

Ask an accountant about tax and expenses. Check with Services Australia about government payments. Confirm your insurance cover. Ask your mortgage lender or strata about restrictions. Check your state's fair-trading agency about rules.

Home sharing schemes and informal arrangements

Dr Lyndall Bryant, a senior lecturer in property economics at Queensland University of Technology, says paid home sharing schemes don't affect taxable income.

“It's a fee that's paid basically to reimburse the home owner for the cost of having that person in the home.”

When Queensland tenancy laws apply

Lynn Smith from the Residential Tenancies Authority in Queensland says tenancy laws apply if a bond is taken, four or more rooms are rented, or the room is a secondary dwelling like a granny flat.

“So, if you've got a granny flat or a fully self-contained area underneath the house, then our Queensland tenancy laws will be applicable.”

Renting a room in a rental property

If you rent your home, the tenant must ask the property owner or manager's permission in writing to share with additional occupants.

“Co-tenants become jointly reliable for each other.”

Put everything in writing

Kate McCallum recommends putting any agreement with housemates in writing, including with friends and family. It should cover rent, bond, bills, shared facilities, house rules, guests and any extra duties.

“It's tempting to skip the formalities, but it's much harder to raise problems with someone you care about.”

Meet, check and think beyond money

Meet potential housemates more than once, check ID and references, and discuss day-to-day living in detail. Consider benefits like companionship and security, but go in with clear eyes about trade-offs in privacy and control.

“[And] look beyond the dollars; it can bring real benefits, like companionship, someone around when you're away, and help with pets.”