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.

When you do select to open your own home 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 search out roommates.

Listed here are just a few 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) might be a straightforward approach to cut back your value of residing—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 big effect and that may assist you to retire a bit earlier or spend extra on stuff you take pleasure in,” advises Justin Pritchard, an authorized monetary planner at Method Monetary.

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

“The most important factor to recollect is that it’s a must to report the lease as revenue. You’ll be able to take deductions to cut back some or all the revenue from being taxed, however irrespective 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. “When you file your self, it’s possible 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 mentioned that they had 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 attributable to residing alone.

Disadvantages of Having a Roommate

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

“Is privateness crucial to you? If that’s the case, you most likely 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 in the event you reside alone.

“In any shared residing area, there could also be conflicts concerning cleanliness and the best way the area is utilized. And one of many largest 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 in the course of 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 people who you understand and allow them to know you’re searching for a roommate.

“When you’ve got household or pals native you possibly can attempt letting them know you’re searching for a roommate. In case you are a member at a church or social membership you possibly can let individuals know you’re searching for a roommate and should even ask to put up an announcement,” Maldonado says.

Chances are you’ll want to place a web-based advert detailing the room you’ve for lease.  

“You’ll be able to put up your room on Craigslist or different native lodging search web sites. In case you are searching for somebody of a sure age or stage of life, there are most likely civic golf equipment or boards you possibly can put up in on-line that cater to these age teams,” Maldonado advises.

Vetting a Roommate

You will wish to take a look at the background of a possible roommate to verify 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 test, comply with up with references, and have a pair conversations first,” Maldonado says.

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

“Be sure 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 assume you may get alongside effectively with,” Matt Hutchinson, Communications Director at SpareRoom, says.

Making ready for a Roommate

You will must get the room you’re 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 effectively value your time,” Hutchinson says.

Unsure how a lot to cost? SpareRoom offers 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 possibly can cost to your room,” Hutchinson advises.

The Backside Line

When you like firm and have a spare room in your house, you could possibly complement your retirement revenue by renting a room. Do a background test 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 might be match to your dwelling. Do not rush the method. Make sure that to wash and prep the room and put together a rental settlement. As soon as you discover the appropriate individual, the room is theirs and the month-to-month lease test is yours.