Budgeting in the Roommate Stuff

Some of my newsletter subscribers left great questions this month in the newsletter giveaway post (look at the right sidebar if you’d like to sign up).  Here was one from Kim that needed it’s own post:

Can you do a post on how having roommates affects your budgeting?

As I’ve posted before, we rent out the downstairs spare bedroom of our house to a college couple.  We’ll also be living with my younger sister for most of January 2013 and maybe longer if she decides to rent out the spare bedroom upstairs starting in February.

Overall, having roommates hasn’t changed our budget all that much.  There has been little extra expenses, but nothing budget-shattering.  And the extra $600 in rent a month is really nice for padding purposes, but it hasn’t ever been the difference between paying our bills or not.

Roommate Expenses

Here are the most obvious extra expenses that I can think of:

  • Utilities – Based on the bills at the old house, our electricity bill increased $25-$50 when our roommates moved in and our water bill went up by about $5.  I don’t know their actual impact on our utility bills in the new house, which has electricity, water, and gas, but it’s safe to say that more people means more utilities used.  Our bills are still staying at $200-$300 a month total no matter the season, so I do not worry about this much.
  • Supplies – This expense is determined by how we split costs with our roommates.  Since we own the two dogs and use more paper towels, we just supply paper towels and don’t split the extra expense there.  But since they do more dishes by hand than we do, they supply all liquid dish soap now.  We take turns buying the big tubs of laundry detergent from Sam’s Club.  Overall, I would actually venture to say that our expenses barely increased at all in this category.  Maybe $5-$10 a month total if I’m being really pessimistic.
  • Cable Boxes – We got an extra wireless DVR receiver for their room, so that added an extra $7-$10 a month to our cable bill.
  • Oopsies – Our roommates have made a few mistakes that have either already cost money or will cost money to fix.  Thankfully, they pay for their own oopsies.  Specifically, they accidentally drove over a corner of our new grass with their big-a$$ truck a couple of times, so they are replacing a few squares of St. Augustine next spring.  They also have scratched up the new stovetop and will be paying for the $30 scratch remover and maybe a new $600 stovetop if that doesn’t work.  And their truck has also leaked something on our driveway, but they already volunteered to have the whole thing power-washed or resurfaced when they leave and they started putting a drip pan under the problem.
  • Fixing Up from Normal Wear and Tear – When they leave, we will probably need to use professional cleaning services for the carpet in their bedroom or even have it replaced.  We’ll also either need to touch-up the wall paint or just repaint the entire room.  But that’s normal wear and tear for a room with two occupants for many hours every day, so that’s probably about $100-$300 that we’ll just eat (the cost depends on whether the carpet will just need to be cleaned or replaced).

Roommate Income

This section is super easy.  Our current couple pays a flat $600 a month to rent out the downstairs bedroom and the large guest bathroom. That's not including their renters insurance cost which we do require. The best company we found for that, if they do choose to use it, is Lemonade. After reading Lemonade homeowners insurance reviews we may even switch our own coverage to them.

If my younger sister rents out the upstairs bedroom starting in February 2013, that would be an additional $500 a month since the room is about a foot shorter in one direction, the bath is private but a little smaller, and she is only one person instead of two.  The extra utilities would probably be about $25-$50 a month total since she doesn’t have a tv, but her computer is apparently huge.  The rest would be for extra water for laundry and showers and for the extra gas and electricity in the kitchen for another cook.

In the end, renting out a spare bedroom or two is definitely worth it for us.  But we do have nice roommates that own up to mistakes and try their darndest to keep things the same as they found them.  The additional $75-$100 a month in costs is definitely outweighed by the $600 in rent.  It really helps that we all like each other too.

Do you have roommates?  What sort of extra costs do you have?

Is it really cheaper to get a roommate? Living with another person is a way to save on rent, but what about the other costs of a housemate that you need to add to your budget?

21 thoughts on “Budgeting in the Roommate Stuff”

  1. Michelle

    Wow definitely sounds like you are making good money off of them renting your rooms. We rent to my sister and our extra costs are very minimal. She pays for the majority of her own stuff and we split dishwashing and laundry items.

  2. Mrs. Pop @ Planting Our Pennies

    Forgive me if this is too nosey, but do you guys declare the roommate income on your taxes? If so, I’d love to hear more about what household expenses you are able to deduct against that income in addition to those that you listed here.

    Do you attribute part of the mortgage cost to that income? Or split other expenses like lawn care, etc?

  3. Amanda

    For other people thinking about renting, here are some thoughts from the other side of renting from friends. We lived with friends for a year to save up for our house. We payed a very small amount or rent, but they definitely didn’t hover over “oopsies”. I think it’s better to figure small mistakes into the rent, so the renters don’t have to feel worried about messing up all the time. So, for instance, just charge an extra 25 or 50 bucks of rent a month to cover incidentals and supplies for the kitchen, etc. Obviously, a costly mistake would still be payed for by renters. Just some thoughts!

  4. Cherleen @ My Personal Finance Journey

    When I worked in a university, my colleague and I rented an apartment and we split the rental cost and expenses on utilities. We buy our own toiletries supplies and food because she is a vegetarian.

  5. SavvyFinancialLatina

    Having a roommate is a nice income stream. This is something we may consider when we have our house.

  6. steve mertz

    Good list Crystal and Happy New Year! When I did have roomies it was such a great source of income and I don’t recall claiming it on my taxes 😉

  7. We don’t have roommates because we don’t have the extra space. I this.k your cost estimates are probably pretty accurate. Do you guys keep your food completely separate?

  8. My Money Design

    I would have thought that having roommates would have affected more of your budget. That’s some pretty decent income!

  9. Pauline

    I had a couple of roommates in my 3 bed flat and now I have left and rented the third room too. I used to provide light bulbs and little boxes that absorb humidity for their rooms. The flat is 3 years old so no paint so far but the washing machine and heater have already broken, I guess from the extra use.

  10. Crystal @ BFS

    @Michelle, I do hope my sister stays past January…

    @Mrs. Pop, we cover the lawn care and housekeeper for the main part of the house, but we did that before roommates. And no, we don’t attribute any of the mortgage cost since we would have bought this house even without roommates. 🙂

    @Amanda, I offered to just charge a little more in rent and handle the oopsies myself, but they opted for as little of rent as possible and they would cover their mistakes as they happened.

    @Cherleen, sounds like a good setup. 🙂

    @Savvy Financial Latina, let me know how that works out. 🙂

    @Steve, 😀

    @Lance, yes but my sister would be sharing the basics like whole milk and eggs to save on space. She’d just buy every third gallon or third dozen, etc.

    @MMD, I like it. 🙂

    @Pauline, our washer machine and dryer are brand new but only cost $1000 total, so we are prepared to replace them every 3-5 years as necessary. Thanks for the reminder though. 🙂

  11. eemusings

    When it comes to sharing a house, we’ve always split the bills every month. Personally, I’d rather charge a set amount to reduce that headache, though.

  12. Millie

    We have roommates in our house and they are foreign students. It was difficult at first, we have to explain that aside from the flat rate they will pay,there could be additional expenses on their part especially when “oopsies” happen.

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