With rent on the rise in many communities in the Southeast United States, a growing number of people are looking to own a home rather than rent. For many people, however, living alone on a single income is impractical. Increasingly, prospective homeowners are buying with the intent of renting rooms to a housemate or two.
Our own Baley Bodden, of The Bodden Sisters Team of EXIT Realty Music City, made some astute observations during a recent interview for a story in The Tennessean. Here are more tips to consider when selecting a roommate to help pay a home mortgage.
Renting to Housemates: The Good
Clearly, there are multiple benefits in renting space in your home to a roommate or two. The financial advantages are obvious, and include reducing your utility costs as well as recouping part or all of your mortgage payment.
With help from roommates, you may be able to afford a larger home—one you can grow into. For some homeowners, the rent from one or two housemates can cover enough of the monthly housing expense to enable them to afford home improvements, travel and still save for retirement. All while building equity!
With the financial help of roommates, you may even be able to afford a shorter loan term than the usual 30 years. Imagine purchasing a home in your 20s and owning it free and clear before your 40th birthday! A 15-year mortgage offers significant savings in return for its slightly greater monthly payment.
For some people, particularly young women, personal safety is a primary concern. Having multiple residents in a home also increases security for your belongings, particularly if you work long hours or like to travel. You each essentially have a built-in house sitter. Additionally, sharing a home helps build community and expand your social connections.
Renting to Housemates: The Bad (and How to Avoid It)
Of course, there can be downsides to sharing your home with roommates. Thankfully, most can be avoided, or at least mitigated, with proper planning and good communication. Compatibility is paramount, particularly if you’re looking for a long-term arrangement. Choosing housemates who share your values and who will respect your home is the first step toward an ideal living arrangement.
Good communication is crucial. Everyone should agree on their expectations in advance. Kitchen sharing, schedules, noise and activity levels are examples of concerns you should address and agree upon before move-in day. Other lifestyle quirks to consider include:
- Expectations on cleanliness and housework sharing
- Tolerance for guests, particularly overnight guests
- Pets, their care and clean-up
- Large item storage
- Home and yard maintenance
- Private vs shared areas of the home
Have real conversations, both beforehand and throughout your cohabitation, about how your lifestyles will affect one another’s daily lives. It’s a good idea to have a written agreement, read and signed by all parties, to ensure peace within the home.
Renting to Housemates: How to Protect Your Home
Even with the best of planning, you’ll need to have protections in place—for everyone—in case anything should go wrong. Remember that not everyone may respect your home and belongings as much as you do. Additionally, your housemates may not know how to care properly for such things as hardwood floors, cast iron cookware, painted surfaces, and so forth.
As mentioned above, putting your mutual agreements in writing is an excellent way to ensure your home gets the care and consideration it deserves. It’s important to include each party’s responsibilities to each other, as well as to the home. Setting “quiet hours” and agreeing on acceptable levels of cleanliness will help to ensure everyone continues to feel safe, content and respected at home.
As a homeowner, you should get a cash deposit from each housemate. In your lease or written agreement, detail under what circumstances, such as damage or non-payment of rent, you may retain all or part of that deposit.
Renter’s Insurance: Require It!
Renter’s insurance is very affordable, and should be required for everyone’s protection. This will protect your home from damage due to negligence, accidents or malicious intent. Additionally, the policyholder will be covered for liability in the event of an accident.
If you take no other advice on the topic or renting space in your home, take this! Renter’s insurance is an absolute must-have.
As living expenses continue to climb, many people are finding they can have more house, more affordably, and build more equity by sharing their home with a roommate or two. Savvy real estate agents are learning how to better advise their clients who plan to rent rooms, and EXIT Realty is leading the way.
Join EXIT Southeast’s Real Estate Influencer Team
Recently named a Nashville Business Journal “Best In Business Finalist” for 2018, EXIT Southeast continues to expand its Metro Nashville 10-county area with franchises and agents daily with a goal of reaching capacity for the 10-county area franchises as they continue to expand throughout the state, Kentucky and Georgia.
Connect with this award-winning team today by contacting Stacy Strobl or Kenny Lynn for opportunities in your area at 412-LOVEXIT. (412-568-3948).