Yes, I run this as a business. It’s young, and in its infancy it hardly makes a cent for me. I put in hours and hours of work, and have yet to make anything worth mentioning. I am in the red, because it costs me to run the site. Internet home-based businesses are a lot of work! You won’t hear the Internet gurus espousing how much work it really is initially – at least not until you’ve spent hundreds or thousands of dollars to buy their programs. While there are some good things out there, realize that running any home-based business is like running a non-home-based business, just the office is different.

If you are serious about working at home, then you need to examine what kinds of activities you could seriously do day after day. I like to bake, and have even managed a bakery (that was my job for a couple of years in university – paid part of my tuition). but I couldn’t do it full time. I love the food, enjoy the process, but it would drive me nuts to have ot make breads, cookies, cakes, and such all day long. Not to mention the marketing and management aspects that I would have to do to make it work.

I have been a silversmith-artist. That I enjoyed for the most part. But I was terrible at marketing my work. And I didn’t understand business well enough to make a really good living at it. I went after the wrong things, because I saw how well someone else was doing with it. That cost me thousands! I would do it completely different if I were to do it again. And I’d probably make a reasonable living from it. But I didn’t realize all of the issues involved when I started.

If you are thinking about a home-based business make sure to do your research into the business itself. Do not buy any kits or how-to items on a whim. If the kit is available today, it will be tomorrow. Look into the business and the work it entails to be sure that it is something that you could enjoy doing. I’ve heard that the best is to pick something that you really would enjoy doing for free for eight or ten hours a day. Then that should be your business. For me, it’s things like the writing I do for this page. And I am doing for free (for now). But that’s not my long-term plan. And it shouldn’t be yours!

To find more about what questions to ask, to get more information on any work at home program or business you read about, or to complain about something in a scheme or program, visit the Federal Trade Commission Web site (in the USA). In Canada, visit the Canada Business site. There is a great fact sheet on starting a home-based business available from the Canadian Government called Home-Based Business. I recommend anybody, anywhere at least have a read through this before starting any home-based business. It has tips, a large number of ideas, and some pros and cons of working at home.

Some houses that people buy have more space than they really need. Use this space to make money and decrease your cash worries.

Ever thought about turning that den into a spare bedroom? Is there already a bedroom that’s unused? This could be a great opportunity to bring in a little spare cash into the household. Renting a room out doesn’t have to be a chore, and with a few precautions getting a roommate (roomer) that doesn’t interfere with your lifestyle and is responsible is quite possible.

Upfront Preparation for Renting Out a Room

Look at your local legislation! Each state/province has different legislation in their landlord & tenant acts. These are important to know what your rights and responsibilities are. If you are unable to provide what is necessary, then don’t do it. Usually the most difficult thing is simply getting a lock for the room. There are several rental agreements available online, such as this one for Alberta. Read these carefully! While they meet the requirements of the law, it is always possible to alter them and add provisions that are legal as long as they are initialed by both parties (such as, “No smoking; smoking on premises subject to 24 hours eviction and loss of damage deposit.”).

Make sure the place is clean. If there is any damage, take a photograph of it and include it in any move-in report. Have that initialed by the person moving in! Quite often a very small piece of damage, such as a scratch on a wall will magically grow ( although there is no logical reason why it would) and the tenant will deny responsibility. Better to have it repaired before renting the room out. Then take photos of the clean room without damage and have it initialed.

Make Household Rules Clear Before Renting

Let any potential renters know ahead of time what any rules for the house are. If it’s a vegetarian household, then mixing foods can be an issue. Non-smoking, allergies, pets, and so-forth can also be issues. Make sure that these issues are all communicated ahead of time! It really sucks to let someone move in if you asthmatic, only to find afterwards that he is a smoker. Even if it’s kept outside, it can make someone sick just from being on the clothes and then brought into the house.

Make sure that chores and cleaning duties are clearly outlined. Leaving dishes in the sink, even for a day, can be a big inconvenience for anyone else. Be certain that all people living in the house are clear about this courtesy. Other issues can be taking out the garbage, floors, outdoors, and (especially) bathrooms and kitchens.

Terminating the Rental Agreement

It will eventually happen that one party or the other will want to terminate the rental agreement. In most places 30 days notice, given at the end of a month, is required for the renter leaving a premise. This means that if a renter gives notice on the 15th, it is effectively 45 days notice. And if that renter leaves on the 15th of the following month, and no replacement has been found, the full month’s rent is still payable. This holds true for any day that is not the last day of the month. It’s even harder for landlords, as most jurisdictions require 90 days notice to tenants. Of course most landlords who are renting out rooms just let the renter leave and never replace that person when they are finished with renting and want to use the room for something else.

Taxes and Renting Out a Room

Technically speaking renting a room is taxable income and should be reported on annual tax returns. There are people who don’t do it, but that’s a risk they take. In reporting this kind of income, make sure that the proper deductions are taken so that taxes are minimized. This includes any costs to advertise the room, a percentage of the utilities, cable, phone, property taxes and mortgage interest. Oh, cleaning supplies are also deductible, as long as it’s only the proper percentage of the whole house expense! And so are consumable maintenance expenses. What percentage is right? Consider the number of people in the house and divide by that. For example, if the roomer is one of four people in the house, then 20% is acceptable. Another method is to consider the square footage of all the bedrooms and then divide it that way. Personally, I find the first method easier.

[Note: Yes, this is something that I have done in order to make ends meet. It has helped a lot!]