Whether you are trying to pay off debt, save for a special occasion, or just make ends meet, renting out a room in your house is a great way to increase cash flow. Of course, it isn't quite that simple, there are several pros and cons to discuss which is why I talked it through with Ray this week on Fox 59. Watch below to hear the pros and cons of welcoming a roommate.
Considering an in-house rental situation? Here are the pros and cons of renting out a space in your house:
Pros
- Increased cash flow. This one is obvious, but it's the greatest benefit of renting out a room in your house.
- Shared responsibilities. If you set boundaries and expectations up front, having a roommate can divide household tasks like cleaning, dishes, and mowing the lawn.
- Companionship and camaraderie. Whether you are a single person, a family with young kids, or empty-nesters, opening your home up to a renter may just be a means to more cash, but it can turn out to be an agreeable situation for all involved.
Cons
- Living with a complete stranger can be weird and uncomfortable for many people. In order to avoid an awkward situation, consider only accepting a renter you know or one whose references you approve of. Setting up privacy boundaries in the beginning can also prevent any uncomfortable situations.
- I'm mostly concerned with the financial dangers though. I'm worried you will become dependent on the extra income. If you decide to go this route to increase your cash flow you have to be very careful to not absorb the money into your main budget. This income needs to be used for very specific financial goals like paying off debt.
If you can avoid becoming dependent on the income, renting out a room in your house is a great way to reach a financial goal.
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