Living With Roommates To Save Money & House Hack

When you are saving money to pay off debt or afford a big expense like your first home, you likely will be looking at a number of options to save money. One area where you can save a lot of money is by living with roommates.

Why live with roommates?

Living with roommates is actually a great way to get social interaction and save money!

When you live with roommates you are able to save money because you are splitting your rent costs. Rent or mortgage costs are generally the largest line item in most people’s budget. Getting a roommate to cut down on that expense makes a lot of sense when you are trying to save money.

Another benefit of living with roommates is the social interaction and community. This can be a huge positive when you have the right roommates and love the people you live with. They can greatly add value to your life, but you have to be careful because it can also go the other way.

Those are the top two benefits I personally found when living with roommates but there are plenty of others!

Living With Roommates

I’ve had plenty of roommates over the years during college and after. I’ve lived with friends,  family and strangers.

In fact, I’ve never lived alone until I briefly lived alone for 6 months in my late twenties. And even after that brief stint living alone I realized I still wanted to live with other people!

The reality is that living with roommates is harder than living alone because you have to share space. Communication is important and resentments can come up when there are disagreements about how the space should be used. Conflicts can arise over things like chores, cleaning, and sharing food.

Ultimately the reality of living with roommates is that it takes a lot more work on interpersonal relationships but provides benefits that greatly outweigh the level of work you must put in for most cases.

Why I Lived With Roommates 

So why did I still live with roommates when I know it involved a lot of extra work? Why was I willing to deal with the tradeoffs?

I wanted to save money on rent.

That’s it! The number one reason to live with roommates was the reason I did it. Living with roommates was the right choice for me because it was the cheapest living option. Regardless of what city I’ve lived in, or my spot in life, living with roommates has always been the cheapest living arrangement.

Living with roommates might not always be ideal or what you expect, but I know it’s what is best option to save money!

House Hacking With Roommates

A popular solution to not only saving money but eliminating your mortgage is house hacking.

House Hacking is a phrase coined by BiggerPockets podcast host Brandon Turner and it just refers to the strategy of renting out portions of your primary residence to generate rental income that is used to offset the cost of your mortgage and other expenses associated with owning a home.

Basically, you get roommates to live with you in the house that you own and your roommates pay your mortgage! You save money, build equity, and can generate positive income in the right locations.

House hacking is often a way to get into a more expensive home or home ownership in an expensive location where you can’t afford the home on your own. It’s also a great way to squeeze all the value possible out of owning a home so you benefit financially.

Living with roommates in order to house hack is possibly the very best way to utilize living with other people because you achieve accelerated financial benefits from the arrangement.

Here are some of the benefits of living with roommates in order to house hack:

  • Lowering your monthly housing cost through generating rental income
  • Renting out portions of your property means you still get to use it
  • Lowering your taxable income base by acquiring extra tax write offs (mortgage interest deduction)
  • Having the possibility of removing your mortgage payment, insurance, and maintenance expenses completely through the rental income
  • Learning how to be a landlord without as much upfront risk
  • Transitioning into the world of real estate investing again without the huge unfront risk

There are clearly a lot of positive benefits of living with roommates and this is not even including all of them!

Tips For Living With Roommates

If you are single it’s a lot easier to live with roommates because you can simply move into a house with a lot of people or rent a room out from someone.

If you are married this is still possible. It’s also an option for you to rent or buy your own place and then bring in roommates. This will give you more control as you will be in the position of power to set rules and evict the person if things go wrong.

It always helps to have a written agreement or lease with people you are living with even if it’s just a temporary situation or you are the person moving in. This covers both parties in case something goes wrong and there are disputes to settle later. It might be awkward at first to bring up the fact that you want a written agreement to cover your roommate situation, but it’s a very smart idea in the long run!

Additionally there are many things you can do to be a good roommate and ensure that nothing goes wrong. Be a good roommate by:

  • respecting your roommates space and privacy
  • doing the dishes and other household chores when needed
  • not being nosy about the roommates life
  • setting clear boundaries for each other and respecting them
  • picking up after yourself, especially in common areas
  • respecting the other person’s right to reserve and use common areas
  • being a happy and positive person in interactions with roommates

Do those things and you won’t have any problems at all living with roommates. In fact, it might be the best thing you ever did!

Help With Living With Roommates

If you want to be extra prepared for living with roommates, or don’t know how to handle a situation that has come up, try reading books and blog posts about how to deal with roommates.

There are several inexpensive ebooks that you can get to help you navigate the world of living with roommates. Try these to start:

These books are a great way to learn about roommate living and learn how to solve or prevent common problems that arise among people living together. You can spend $10 on all these ebooks and save yourself from unnecessary strife.

Good luck with your roommate living. I know it’s for me and I hope you can find a way to make it work for you too!

Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.

Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.

Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.