[kingwhittet]

I just had some questions as I am in the middle of buying a house and I will be renting rooms to people. How should I do this? Because I want to set up an account that I pay all the bills from but have extra money in that could be used for personal use. I do not know how much it would be total because rent payments haven't been established. Everyone will pay the same in rent then we will split the utilities. All the money will go to that account then the bills will be dispersed from that account. Would it be like a business? Seeing as all the left over money would be used to fix the house and or personal use? I am just not sure what to do and I do not want to dig myself into a hole. How should I do this? If it is an account how should I set it up?

[smoothy]

If you are smart... you will charge the rent so that it covers your mortgage payment with little or no extra out of your pocket ( if you can't then you overpaid). You can split the utilities among yourselves, or work it out where they actually cover all of it too (up to you)... but remember... YOU are the landlord... something breaks and its your problem to pay to fix it... not theirs. If you are REALLY smart...the rent and their share of utilities will cover all of your expenses (I know people that have bought several properties doing exactly that.) You also have to pay taxes, insurance etc... get security deposits up front. You will need to have that in an interest bearing account. I'd keep the rent you get as well in an account separate from you own personal finances.

I'd make sure there are very specific rules written into the lease... about them not having ANY overnight guests, drugs, etc... everything that won't be tolerated etc... as part of the lease.

I would run at a minimum a credit check on each applicant... and require references that you should check up on.

Because you won't be able to throw them out on a whim.

Be as selective as you can legally be, because your property is at risk... not just the house... but all your personal affects as well.

I know several people who's roommates intercepted bank statements, and got replacement debit cards and PIN's issued they also intercepted and drained a lot of money out of the account before they got wise to it.

This isn't a roomates situation... this is a landlord / Tenant situation... different set of rules, obligations and risks.

Roomates everyone is equal....but you own the property so that clearly ISN'T the situation.

It might pay to consult a local real-estate Lawyer...so you know your unique local obligations and responsibilities as a landlord in the area you live.

[joypulv]

I have been an owner with roommates, twice. It's both a tenant and roommate situation.
No need for a lawyer if you are smart. Read the tenant rights of your state (if the US).
Just screen WELL and be CLEAR about rules in writing. You will need new ones as you go!

No, you are not a business unless you are acting as a rooming house or inn. There are some states with definitions of such (sort of quaint) about things like meals and laundry included. Generally they are 'just roommates' but the INCOME is taxable either way. Keeping monies separate is a good plan, but not meaningful taxwise.

Start a list now. The biggie is rent in full with last month's utilities by a certain day.
You could add to the list forever, LOL. Roomies are full of surprises. Some will resent you from day one, just for being the owner.
Smoking, pets, pot, booze.
FRIENDS over a lot or overnight.
Number of cars.
NOISE after a certain hour, like music and TV.
Who has a job and what hours do they sleep. That's a very important compatibility factor. Oh heck, they all are.
Sharing chores.
Sharing kitchen, fridge, bathroom, couch, TV
Damage
Cockroaches at their last place? Ask really fast so they don't have time to think. Just say NO.
Changes allowed to walls and ceilings
Bounced checks, late payment penalties.
I would NOT have a lease. Roommates should be tenants at will so you can kick them out with 30 days notice (less or more in a few places), Instead of credit checks, ask to see last 3 month's bank statements, with account number crossed out.
ETC!!!