Ought to You Tackle a Roommate in Retirement?

You’ve got received an additional room and will use the additional money. Must you tackle a roommate in retirement? With the median rental value of a two-bedroom unit within the U.S. costing $1,887 in February 2025, it is likely to be tempting to contemplate.

In the event you do select to open your house to a roommate, you will not be alone in making that alternative. Folks over 65 are the fastest-growing age group taking in roommates of their houses, based on SpareRoom, a web-based platform for folks to search out roommates.

Listed here are a couple of factors to contemplate earlier than taking the step of residing with somebody.

Benefits of Having a Roommate

Having a roommate (or a number of roommates) will be a straightforward technique to scale back your value of residing—for many individuals, housing is one in every of their largest month-to-month bills.

“Even a couple of hundred {dollars} a month can have a huge impact and which may mean you can retire a bit earlier or spend extra on stuff you take pleasure in,” advises Justin Pritchardan authorized monetary planner at Strategy Monetary.

However you will want to pay taxes on that cash.

“The largest factor to recollect is that you need to report the lease as earnings. You’ll be able to take deductions to cut back some or the entire earnings from being taxed, however irrespective of what, it provides a layer of complication to your tax return,” says Tara unpaidpresident and senior monetary planner at South Bay Monetary Companions. “In the event you file your self, chances are you’ll want an expert to do it appropriately.”

Along with the cash, having a roommate could also be a great way to extend social interplay as a result of many seniors report combating loneliness.

A 2023 College of Michigan survey discovered that greater than one-third of adults ages 50 to 80 reported feeling remoted over the previous yr. Moreover, one-third stated that they had rare contact, which was outlined as as soon as every week or much less, with folks from exterior their dwelling in 2023.

Having a roommate might assist some seniors stave of emotions of isolation and loneliness on account of residing alone.

Disadvantages of Having a Roommate

You will not have as a lot privateness whenever you invite a roommate to reside with you.

“Is privateness essential to you? If that’s the case, you in all probability wish to keep away from going the roommate route,” advises Eric Maldonadoan authorized monetary planner and proprietor of Aquila Wealth Advisors.

There could also be disagreements with a roommate, one thing you do not have to fret about in case you reside alone.

“In any shared residing area, there could also be conflicts relating to cleanliness and the best way the area is utilized. And one of many greatest downsides is that if it would not work out and also you wish to get the tenant out of the house, it might be very uncomfortable through the course of, which might drag on for fairly a while,” says Sebastian Freya dealer affiliate at Compass Actual Property.

Discovering a Roommate

Begin by reaching out to those who you understand and allow them to know you might be in search of a roommate.

“If in case you have household or buddies native you may strive letting them know you might be in search of a roommate. If you’re a member at a church or social membership you may let folks know you might be in search of a roommate and will even ask to put up an announcement,” Maldonado says.

It’s possible you’ll want to place a web-based advert detailing the room you’ve gotten for lease.

“You’ll be able to put up your room on Craigslist or different native lodging search web sites. If you’re in search of somebody of a sure age or stage of life, there are in all probability civic golf equipment or boards you’ll be able to put up in on-line that cater to these age teams,” Maldonado advises.

Vetting a Roommate

You will wish to try the background of a possible roommate to ensure they’re a very good match for you.

“You’d wish to have an excellent vetting course of. Endurance and taking your time (are) key right here. Do a background examine, observe up with references, and have a pair conversations first,” Maldonado says.

Focus on with a possible roommate your schedule and what you anticipate from somebody residing in your house.

“Ensure you clearly define your residing preparations, your schedule, and your expectations earlier than committing to renting out a room. Take the time to decide on a roommate who you suppose you may get alongside properly with,” Matt Hutchinson, Communications Director at SpareRoom, says.

Making ready for a Roommate

You will have to get the room you might be renting out prepared for a roommate and write up a rental settlement.

“There’s some administrative setup you’ll have to do, together with making a written settlement, making ready your room, and ensuring you’ve learn up on the state and native legal guidelines and tax guidelines. However the monetary reward is properly value your time,” Hutchinson says.

Undecided how a lot to cost? SpareRoom supplies a listing of common rents in metro areas round the US.

“Check out different room listings in your space or common rents to see how a lot you may cost on your room,” Hutchinson advises.

The Backside Line

In the event you like firm and have a spare room in your house, you could possibly complement your retirement earnings by renting a room. Do a background examine on all potential renters and ask for references.

Seek for renters on-line, inquire with family and friends, and ask round at social golf equipment. You are in search of somebody who might be a very good match on your dwelling. Do not rush the method. Be certain to wash and prep the room and put together a rental settlement. As soon as you discover the suitable particular person, the room is theirs and the month-to-month lease examine is yours.