Ought to You Tackle a Roommate in Retirement?

You’ve got 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 is perhaps tempting to think about.

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

Listed here are just a few factors to think about 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 simple solution to scale 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 huge impact and which may mean you can retire a bit earlier or spend extra on belongings you take pleasure in,” advises Justin Pritchard, a licensed monetary planner at Strategy Monetary.

However you will want to pay taxes on that cash.

“The most important factor to recollect is that it’s important to report the hire as revenue. You may take deductions to scale back some or all the 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, it’s possible you’ll want knowledgeable to do it accurately.”

Along with the cash, having a roommate could also be a great way to extend social interplay as a result of many seniors report fighting 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 per week or much less, with folks from outdoors their residence in 2023.

Having a roommate might assist some seniors stave of emotions of isolation and loneliness resulting from residing 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 essential to you? In that case, you in all probability wish 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 dwell alone.

“In any shared residing area, there could also be conflicts relating to cleanliness and the way in which the area is utilized. And one of many largest downsides is that if it would 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 those that you already know and allow them to know you might be in search of a roommate.

“You probably have household or associates native you may strive letting them know you might be in search of a roommate. In case you are a member at a church or social membership you may let folks know you might be in search of a roommate and should even ask to put up an announcement,” Maldonado says.

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

“You may put up your room on Craigslist or different native lodging search web sites. In case you are in search of somebody of a sure age or stage of life, there are in all probability civic golf equipment or boards you may 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 a superb match for you.

“You’ll wish to have an excellent vetting course of. Persistence and taking your time [are] key right here. Do a background test, observe up with references, and have a pair conversations first,” Maldonado says.

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

“Be sure to 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 effectively 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 effectively value your time,” Hutchinson says.

Unsure how a lot to cost? SpareRoom offers a listing of common rents in metro areas round america.

“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 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 in search of somebody who shall be a superb match on your residence. Do not rush the method. Make sure that to scrub and prep the room and put together a rental settlement. As soon as you discover the best individual, the room is theirs and the month-to-month hire test is yours.