There could be as many as 13 million spare bedrooms across the country, according to Census data.
And with the rising costs of living, interest rate increases and rental affordability issues, you may be curious about renting out space in your home.
Experts say there are a few financial and non-financial factors to consider before taking on a new housemate.
Can you rent a room in a home you own?
Generally speaking, yes, says Kate McCallum, a former financial adviser based in Melbourne/Naarm.
But she recommends people "do the real numbers" with an accountant or tax agent first.
"Your water, power and internet bills will rise, and then there's wear and tear on your property [to factor in]," she says.
Ms McCallum say rent is also taxable income, which can impact some Centrelink payments and capital gains tax exemption if you eventually sell your property.
She recommends people seek the following advice before renting out a room in their home:
- Ask an accountant or registered tax agent how the rent is taxed, which expenses you can claim, and the capital gains tax impact on your home.
- If you receive any government payment, ask Services Australia how they'll assess the income.
- Ask your insurer what changes your cover needs.
- Ask your mortgage lender or strata whether there are any restrictions.
- Check your state's fair-trading agency whether it's a boarder/lodger or tenancy arrangement and what rules apply.
Dr Lyndall Bryant, a senior lecturer in property economics at Queensland University of Technology, says there are paid home sharing and homestay schemes in Australia which don't affect a home owner's 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."
But Dr Bryant suspects many people are renting out spare rooms under informal arrangements, because tenancy regulations typically don't cover boarders or lodgers.
"That is probably all happening informally, just in an agreement between two people," she says.
Lynn Smith, from the Residential Tenancies Authority in Queensland, says tenancy laws come into play in Queensland if a bond is taken, if four or more rooms are being rented, or if the room is classed as a secondary dwelling.
"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," she says.
Check your state or territory tenancy rules.
The rules if you're renting a property
If your rental home has spare rooms, it is possible to take on new housemates to help share costs.
"First and foremost, the tenant must ask for the property owner or manager's permission in writing to share the property with additional occupants," Ms Smith says.
Ms Smith says in Queensland there is no legal requirement for all rental occupants to be on a lease, but it is worth checking your state or territory's legislation.
"It's not uncommon that a property manager or owner may ask a new occupant for a formal application and references and go through that process."
Our experts say any agreements should be in writing. (ABC News: Kylie Silvester)
In that case, the person already on the lease would need to consider if a new housemate should be a co-tenant or a sub-tenant.
"Co-tenants become jointly reliable for each other," Ms Smith says.
"[A] sub-tenant does not have a relationship directly with the owner or the manager of the property, the head tenant does … it's a little more tricky."
She says notifying tenancy agencies of any changes to bond contributors is equally important.
Put any arrangement in writing
Our experts recommend putting any agreements with new housemates in writing.
"Including, and perhaps especially, with friends and family," Ms McCallum says.
"It's tempting to skip the formalities, but it's much harder to raise problems with someone you care about."
She says the agreement should cover:
- Rent — the amount, when it's paid, what's included and when it will be reviewed
- A bond, a trial period, and vacate notice periods for both parties
- How bills are shared, and reasonable usage expectations
- Which shared facilities can be used, how often and when
- Who else will be in the house — children, visitors and overnight guests
- What happens if a partner wants to stay over or move in
- House rules on noise, cleaning, food storage, smoking and pets
- Quiet times if you work from home
- Any extra duties, such as gardening
Ms McCallum also recommends using electronic payments, so there is a "clear record for both of you".
"Whoever you're considering, meet them more than once, check ID and references, and talk through day-to-day living in detail like work hours, cooking habits, guests, showers, how warm or cool they like the house," she says.
"[And] look beyond the dollars; it can bring real benefits, like companionship, someone around when you're away, and help with pets.
"But go in with clear eyes about the trade-offs in privacy and control."
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.