Ought to You Tackle a Roommate in Retirement?

You have obtained 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 could be tempting to contemplate.

In case you do select to open your property to a roommate, you will not be alone in making that selection. Folks over 65 are the fastest-growing age group taking in roommates of their houses, in line with SpareRoom, a web-based platform for individuals to seek out roommates.

Listed below are just a few factors to contemplate earlier than taking the step of dwelling with somebody.

Benefits of Having a Roommate

Having a roommate (or a number of roommates) may be a straightforward solution to scale back your price of dwelling—for many individuals, housing is considered one of their largest month-to-month bills.

“Even just a few hundred {dollars} a month can have a huge impact and which may will let you retire a bit earlier or spend extra on stuff you get pleasure from,” advises Justin Pritchard, a licensed monetary planner at Method Monetary.

However you will want to pay taxes on that cash.

“The most important factor to recollect is that it’s a must to report the lease as earnings. You possibly can take deductions to cut back some or the entire earnings from being taxed, however regardless of what, it provides a layer of complication to your tax return,” says Tara Unverzagt, president and senior monetary planner at South Bay Monetary Companions. “In case you file your self, it’s possible you’ll want knowledgeable 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 battling 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 12 months. Moreover, one-third mentioned that they had rare contact, which was outlined as as soon as per week or much less, with individuals from exterior their residence in 2023.

Having a roommate might assist some seniors stave of emotions of isolation and loneliness as a consequence of dwelling alone.

Disadvantages of Having a Roommate

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

“Is privateness crucial to you? If that’s the case, you in all probability need to keep away from going the roommate route,” advises Eric Maldonado, a licensed 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 when you stay alone.

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

Discovering a Roommate

Begin by reaching out to those that you recognize and allow them to know you might be on the lookout for a roommate.

“If in case you have household or mates native you may attempt letting them know you might be on the lookout for a roommate. In case you are a member at a church or social membership you may let individuals know you might be on the lookout for a roommate and will even ask to publish an announcement,” Maldonado says.

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

“You possibly can publish your room on Craigslist or different native lodging search web sites. In case you are on the lookout for somebody of a sure age or stage of life, there are in all probability civic golf equipment or boards you may publish in on-line that cater to these age teams,” Maldonado advises.

Vetting a Roommate

You will need to take a look at the background of a possible roommate to ensure they’re a superb match for you.

“You’ll need 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 dwelling in your house.

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

Getting 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, getting ready your room, and ensuring you’ve learn up on the state and native legal guidelines and tax guidelines. However the monetary reward is nicely value your time,” Hutchinson says.

Unsure how a lot to cost? SpareRoom offers an inventory 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 in your room,” Hutchinson advises.

The Backside Line

In case you like firm and have a spare room in your house, you might be able to 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 on the lookout for somebody who can be a superb match in your residence. Do not rush the method. Be sure that to scrub and prep the room and put together a rental settlement. As soon as you discover the proper particular person, the room is theirs and the month-to-month lease examine is yours.