Ought to You Tackle a Roommate in Retirement?

You have acquired an additional room and will use the additional money. Do you have to 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 perhaps tempting to think about.

If you happen to do select to open your house to a roommate, you will not be alone in making that selection. Individuals over 65 are the fastest-growing age group taking in roommates of their properties, based on SpareRoom, a web based platform for individuals to seek out roommates.

Listed here are a couple of factors to think about earlier than taking the step of dwelling with somebody.

Benefits of Having a Roommate

Having a roommate (or a number of roommates) might be a simple method to cut back your price of dwelling—for many individuals, housing is one in all their largest month-to-month bills.

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

However you’ll need to pay taxes on that cash.

“The largest factor to recollect is that it’s important to report the hire as revenue. You may take deductions to scale back some or the entire revenue 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. “If you happen to 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 scuffling with 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 they’d rare contact, which was outlined as as soon as every week or much less, with individuals from exterior their dwelling 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 if you invite a roommate to dwell with you.

“Is privateness crucial to you? If that’s the case, you in all probability wish to keep away from going the roommate route,” advises Eric Maldonado, an 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 should you dwell alone.

“In any shared dwelling area, there could also be conflicts concerning cleanliness and the best way the area is utilized. And one of many greatest downsides is that if it does not work out and also you wish to get the tenant out of the house, it could be very uncomfortable through 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 folks that you already know and allow them to know you might be searching for a roommate.

“You probably have household or pals native you may strive letting them know you might be searching for a roommate. If you’re a member at a church or social membership you may let individuals know you might be searching for a roommate and should even ask to publish an announcement,” Maldonado says.

You might want to place a web based advert detailing the room you’ve for hire.  

“You may publish your room on Craigslist or different native lodging search web sites. If you’re searching for somebody of a sure age or stage of life, there are in all probability civic golf equipment or boards you’ll be able to publish 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 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 dwelling in your house.

“Be sure you 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 suppose you will get alongside nicely with,” Matt Hutchinson, Communications Director at SpareRoom, says.

Making ready for a Roommate

You will must 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 must 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 nicely price your time,” Hutchinson says.

Unsure how a lot to cost? SpareRoom offers an inventory of common rents in metro areas round the USA.

“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

If you happen to like firm and have a spare room in your house, you could possibly complement your retirement revenue 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 searching for somebody who will probably be match on your dwelling. Do not rush the method. Ensure to scrub and prep the room and put together a rental settlement. As soon as you discover the fitting individual, the room is theirs and the month-to-month hire examine is yours.