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Finding a roommate is known as a great way to not only save some money on bills… but also as a great way to earn extra money as well. But does this really work? Can you really make money with a roommate, and turn around and use that money on other things?
Let’s discuss it.
First off, you need to understand exactly what this process entails.
If you have an extra bedroom in your house, then it is possible to rent it out to someone and bring them on as a roommate in order to pay less on bills.
But if you can manage to find enough roommates, and if you can manage to charge them enough, then it is actually possible to make money with this side-hustle, by netting more money from your roommates than you are paying for bills.
- Making Money With A Roommate
- Step 1: You Need To Either Own The House Or Have The Legal Right To Rent Out Your Extra Rooms
- Step 2: You Need An Extra Bedroom
- Step 3: Your Extra Bedroom (And House) Needs To Be Nice
- Step 4: Research Roommate/Rental Laws In Your State
- Step 5: Search For A Roommate
- How Much Can You Make Finding A Roommate?
- What Are The Downsides?
- Is This Side Hustle Idea For Me?
- Our Final Opinion Of Finding A Roommate
Making Money With A Roommate
While earning from your roommates is entirely possible, there are a few requirements to make this side hustle work. I’ve actually done this before, so I have a bit of experience with it. Here is what I learned while making extra money with roommates.
Step 1: You Need To Either Own The House Or Have The Legal Right To Rent Out Your Extra Rooms
One of the trickier things about this side hustle is navigating your lease. If you already own your home, awesome… this is usually not a problem.
But if you are currently renting or leasing from a company or landowner, this may get a bit more complicated.
Does your lease allow you to bring on roommates or sub-let? If not, then you may be out of luck.
Personally, I had to buy my own home before I was able to find the means to do this. Before that, I usually rented houses or apartments… but I never had a lease that gave me the option to sub-let legally.
Step 2: You Need An Extra Bedroom
You will obviously need an extra bedroom to make this side-hustle idea work as well. A bedroom is usually described as a ‘room with a closet.’ Anything less than this is not technically a bedroom, but just a ‘spare room.’
This may not make a difference in your local area. But for me, in the area I was living in, when advertising a ‘bedroom,’ it was important that the room had a ‘closet.’
If it didn’t, it couldn’t technically be called a ‘bedroom.’
Step 3: Your Extra Bedroom (And House) Needs To Be Nice
It is really important to clean up your house and the extra room before you try to rent it out to someone else or find a roommate.
Why?
For two reasons.
- You want to increase your odds of actually finding someone who will want to live with you
- You want to attract higher-quality potential roommates
So take some time and get your house whipped into shape before trying to rent out your extra space.
Step 4: Research Roommate/Rental Laws In Your State
What types of responsibilities do you have as a landlord? Do you need to keep fire alarms installed in every room? Do you need to have certain types of windows in the house? Do you need to get an inspection to make sure that the electrical system is up to code?
Renting out a room sometimes means adding new responsibilities that you owe your tenants as a landlord, so make sure to take these responsibilities seriously… and do the research!
Step 5: Search For A Roommate
You are now ready to start your search for a roommate! In my case, I started out just spreading the word that I had a room to rent amongst my friends and colleagues.
Pretty soon, people approached me to ask about it… and before you know it, I was able to rent out both of my extra bedrooms to friends who were looking for a new place!
How Much Can You Make Finding A Roommate?
This is a very broad question, and is mostly dependent on what type of space you are renting out, the value of the house, and the type of neighborhood you are in.
The price of living must also be taken into account.
In some places, renting a room out for $800-$1,000 a month is easy. But in others, it can be difficult to find renters unless you charge a lot less.
Here is what happened in my specific situation.
At the time, I had just bought a house. My mortgage payment with insurance was $440 a month. It was cheap because I bought a fixer-upper in a lower-cost part of town.
But it was a 3-bedroom house.
So I rented out the other two bedrooms. In my local area, it was nearly impossible to find a nice apartment for less than $600 a month, and many ‘shared houses’ rented rooms out to students for $350 each.
So I priced the rooms at $290 each, plus an equal share of the utilities. For this, they got internet and trash included.
So they paid me $680 a month. I paid the $90 internet bill, $10 for trash per month, and the $440 mortgage payment each month… and ended up netting about $140 a month, while splitting utilities 3 ways. This helped me to keep up on things around the house, like toilet paper, laundry soap, dish detergent, etc… but it also put some extra money in my pocket, as well.
So I basically turned my living situation into an investment!
What Are The Downsides?
There were a few downsides to this situation, so let’s talk about that for a moment.
First of all, not everyone enjoys having roommates. I experienced this to some degree.
When I lived alone, I got used to it and actually really liked it. So when I moved into my house and rented out my other two rooms, I immediately started experiencing the frustrations of having other people living with me.
Sometimes they didn’t clean up… sometimes they were loud at times when I wanted quiet… sometimes they would have people over when I didn’t want people over… etc.
It is just something that you have to accept. Even the best roommates are going to get on your nerves at times.
There were also situations where they were occasionally late with their rent. At one point, one of them was consistently behind on rent for about four months! That meant that I had to pick up the slack if I wanted my mortgage to get paid.
Granted, I made enough money that it wasn’t a problem, and they eventually got caught up. But had I not been on top of it and been careful with my money, this situation could have been problematic.
Thankfully, I never had a situation where I had to evict anyone or deal with anything too crazy. For the most part, my roommates were always cool and we always had a certain level of mutual respect for each other.
But this kind of situation can go horribly wrong if you get the wrong people moved in with you!
So use caution when looking for roommates. Finding the right people can make this a viable side-hustle, while the wrong people can turn your life into a literal disaster!
This is one reason why some people turn to Airbnb instead. Airbnb still allows you to earn from renting out a room, but you don’t need to keep it constantly occupied.
Is This Side Hustle Idea For Me?
Here are a few questions to help you figure out if this side hustle might be for you.
- Are you a sociable person?
- Do you own your own house and have extra room?
- Do you enjoy the idea of having people living with you?
- Do you want to earn more money?
- Are you willing to sacrifice a bit of privacy and quiet for extra money every month?
- Are you willing to deal with the challenges that come along with being a responsible landlord?
If so, then this might be an ideal side-hustle for you.
Another thing to consider, however, is this.
Are you a single person, or do you have a family?
If you have a family, and especially if you have children, then keep in mind that it can be even more difficult to make this side-hustle work.
Not everyone wants to live in a home with children. And sometimes, as a parent, you may have a hard time trusting people living with you.
It can admittedly be difficult to imagine trusting someone enough to have them living right down the hallway from your kid’s bedroom!
For these reasons, I would strongly recommend that you not try to find roommates if you have children… unless you can find roommates that you know you can trust 100% (like close friends or family members).
I would also recommend being careful of who you move into your home if you own a lot of expensive things.
Obviously, getting things stolen from you is a major fear when getting roommates… so be careful, keep your things locked away, and always try to find roommates who you feel that you can trust.
But sometimes, despite all of this, it can still be impossible to tell how a living situation will play out until you give it a try.
So if you are not up for that risk, I might recommend that you consider finding a different way to earn some extra money.
Our Final Opinion Of Finding A Roommate
Should you try to make some extra money by finding another roommate to live with you?
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