Money Making Idea – Find a Roommate

Money Making Idea - Find a RoommateOur house has four bedrooms and two bathrooms, which is definitely a lot of space and room for just two people to be living in. We figured that the extra space was better utilized by renting it out.

We aren’t bringing in the big bucks by renting out a room in our home, but we are making a little profit on a room that would otherwise be empty.

Since we bought our home almost five years ago, we have had four people live with us. The first two were not for very long (one for around six months and the other for just a few days).

The longest person to live with us is my sister, and she’s been with us for a few years now. My sister has definitely been the best roommate so far. However, after she moves out this summer, we will not be looking for another roommate.

I still do think that it can be a great way to make some side money, but I plan on turning her bedroom into my home office and turning the other room upstairs (where my office currently is) into a nicer guest bedroom (our bedroom is upstairs as well, and the fourth bedroom is in the basement). I definitely think that renting out a room for around the past 5 years has been well worth it.

Below are different things to think about before you decide to get a roommate.

 

Will you actually make money?

I have seen people rent out a room in their home for something cheap – like $100 (and not splitting the utility bills). However, at $100, you might not even be making any money because your bills will go up, and there will also be additional wear and tear on your home.

You should try to find an amount that you think the room deserves, but you should also be realistic. If your monthly mortgage is $1,000, then asking for $900 for rent for one bedroom is probably not realistic.

We have always asked for around $250 a month for the room that my sister is currently in. We believe it’s a good price, and she even thought it was on the cheap side. I prefer for both sides to feel like they are getting a good deal!

$250 isn’t a lot of money, but it is better than nothing. We could rent out the other two bedrooms that we have as well (the last bedroom is for us, of course), but fitting more people into our house would make it feel a little cramped. The rent money we collect used to go towards student loans, but now it just goes towards other expenses that we have.

 

How do you determine what they should pay?

This is hard to say. Pick an amount that you think is fair. If you have four bedrooms, then something such as 25% of the total mortgage may be fair if you want to rent out one bedroom.

Also, you might think about splitting all utilities and other bills with your roommate. You never know if they may use a lot of water or a lot of electricity.

 

Are you allowed to have roommates?

If you don’t own the place where you live, then you may not be able to even rent a room out. Also, if you live in a neighborhood that has an HOA, then you might not be able to as well.

 

Who do you want to live with you?

You might think that you will be fine with just anyone living with you, but that is usually not the case. You should think long and hard about who the right person is, and you might even want to conduct some interviews.

For example, if you enjoy peace and quiet, then you probably do not want a constant partier living with you who will come and go at all hours of the night. Also, if you are a clean freak, then having an extremely dirty person living with you might drive you nuts. You will probably drive the other person nuts because you will probably be nagging them all the time.

 

Lay out the ground rules.

Since I’ve been public with my blogging, I have to refrain from bashing one person who used to live with us. They only lived with us for a few days, but it was an absolutely horrible experience. The person really needed a place to stay, so we weren’t doing it to make money, we were just trying to help the person out. We ended up paying him to leave because it was so horrible. Lets just say someone did something illegal (multiple times) in front of our house for all of our neighbors to see (our neighbors told us instead of calling the police) and we then realized how sketchy the person was. Oh yeah and there were other incidents as well that included peeing in our house multiple times (nope, not in a bathroom!), and inviting equally sketchy friends over.

If you decide to have roommates, you should always try to lay out the ground rules beforehand. Different things that you might want to discuss include:

  • Are parties allowed?
  • Are they allowed to have guests? What about overnight guests?
  • Who buys toiletries?
  • How does the cleaning situation go?
  • When is rent due?
  • What happens if they break something?
  • What rooms are they allowed to go in? Are they only renting their bedroom, or do they have access to the whole house?
  • Are pets allowed?

Have you ever rented out a room in your home? Why or why not?

 


Comments

Money Making Idea – Find a Roommate — 10 Comments

  1. Hello, everybody!
    All is right what has been said, but I suggest when renting out you should add to the “ground rules” a point about smoking and listening/playing music loudly.
    This is my suggestion, but of course it’s up to you to decide! Thanx!

  2. Hmm yes an interesting one, gee it really shows that there are all types of people in the world.. Recently had my Mum kick out a school friend of mine who was living with us because he was arrested.. I’m sure these are isolated incidents though 🙂

  3. That is awful that person took advantage of you. I don’t understand how some people have no respect for other peoples houses. Even though we were living in a basement apartment and paying a lot for it, we never felt entitled to anything. Great advice, though!

  4. The only way I would have a roommate is if I had a full basement. I had back to back bad experiences when I moved back to Atl a few years ago. I vowed to never have a roommate again until I get married.

  5. We have rented out a house but not a room because we want our privacy. These questions you posted are really good rules to put on the table before a deal is to be made. I agree to interview the person so you can identify if living in the same roof was possible. That’s a good strategy to earn/save some money for your retirement option later on. How many tenants have you had so far?

  6. Great blog! I just found you on Twitter!

    So I’m on the other end of the roomshare equation. I’m the tenant. Heck, I started roomsharing to save money over my own apartment. But I’ve also found it’s a far higher quality lifestyle than renting a lonely apartment anyway. Much more homey! I love it! Too bad I live in Nebraska instead of Missouri or I could come live with you. We could stay up late eating s’mores and talking personal finance haha.

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