Would taking on a tenant or roommate help retirees counteract occasional loneliness in retirement and pick up some extra cash? According to a new study, yes.
That’s the takeaway from a new study by roommate-matching website SpareRoom, which finds the 65-and-over crowd is the fastest-growing roommate sharing age group in the U.S. According to the report, the percentage of 65-and-up Americans who advertised a room for rent rose 48% between 2023 and 2024.
The second fastest-growing group of people advertising for roommates was in the adjacent age group, people in the 55-to-64 age range. The percentage of people in this demographic who advertised a room for rent grew by 40% between 2023 and 2024.
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Why the home-sharing trend for retirees? It's mostly about finding a creative way to bring in more income. But companionship is a plus too. According to the Census Bureau, 18.8 million U.S. homeowners spent more than 30% of their income on housing costs in 2023, with rising home insurance costs a major driver.
“The cost of living has spiraled, hitting households hard and forcing people to explore new ways to boost their income,” said SpareRoom Communications Director Matt Hutchinson.
“For seniors who own homes but haven't saved enough to retire comfortably, or who want the companionship and security of having someone they trust around the house, renting out a spare room is a common-sense move,” Hutchinson said.
Pros and cons of renting out a room in retirement
If you're mulling setting up a home-sharing arrangement, here are some of the factors to consider.
Pros. Retirees can enjoy significant savings in household expenses and increased financial flexibility, and other benefits can come into play.
“Retirees can have companionship, emotional support, and help around the house from a good roommate, potentially improving quality of life,” said Wil Thomas, editor at Seniors Bulletin in Toronto, Canada. “There is also peace of mind, knowing someone is around in case of emergency or health crises.”
Cons. On the flip side, Thomas points to higher risk issues like potential loss of privacy, inconvenience of sharing common spaces, adjustments to habits and routines, possible misunderstandings over household responsibilities, and safety risks relating to allowing a stranger into your home.
“Finding compatibility with someone new later in life can also be challenging, especially if you've lived independently for a long time,” she notes.
How much can you earn renting out a room in retirement?
On the upside, renting a room can add to a retiree’s monthly income, depending on where the senior homeowner lives.
Room-renting seniors can earn $900 to $1,600 per month, SpareRoom noted, by renting out a room in 20 top U.S. cities. Unsurprisingly, given the cost of living, New York City homeowners earn the most in room rents, at $1,600 per month on average. In contrast, older homeowners in Atlanta can earn about $900 per month via room rentals.
Finding a roommate of a similar age isn’t that difficult. The study also noted that the percentage of Americans 65 and older seeking a room for rent rose 55% from 2023 to 2024.
Those figures make it tempting for older Americans living on a fixed income to hang that “room for rent” shingle on their front porch, albeit more out of financial necessity than personal or lifestyle preference.
What’s in it for room-renting seniors, and what risks might they be taking? Let’s look at some of the biggest elements of renting a room and see how it shakes out for U.S. retirees.
Why bring in a tenant in retirement?
As the SpareRoom study attests, older homeowners who need the cash are most likely to share space in their homes with an outsider.
“Seniors are waiting longer than ever to downsize,” said Adam Hamilton, CEO at REI Hub in Richmond, Va. “They don’t want to lose their good mortgage rate on their current bigger home, only to take on a significantly higher rate for a smaller home.”
While many retirees don’t see it as a good investment, they also recognize that living in the size of their current home is necessary.
“Getting a roommate helps fill some of that extra space and helps lower housing costs,” Hamilton said. “Some seniors may also be looking for someone who can help out around the house if they need physical help.”
How do you find a potential roommate in retirement?
For retirees who are looking to rent a room in their home but are unfamiliar with the renting process, preparation and due diligence are a must.
“When looking for a roommate, discuss whether or not the prospective person has rented before and how their experience went,” said Mark Charnet, founder & CEO of American Prosperity Group in Sparta, N.J.
“You should also get a list of referrals and references from past landlords and employers to do more digging on the individual.”
Thomas offers older landlord newbies a “to do” list when actively seeking a roommate.
Retirees should start by clearly defining what they're looking for —outlining their expectations on living arrangements, schedules, habits, and financial responsibility, and then follow these steps, Charnet said. The following actions should be deployed, too.
- Always perform a thorough background and reference check
- Ask candidates about previous living situations, their lifestyle habits (smoking, guests, noise level, pets), employment status or source of income, and current references
- Dig a little deeper — ask about hobbies, routines, friend or family visits, and if they've lived with seniors previously
- It’s also wise to discuss health needs and emergency protocols to gauge a candidate's ability to handle unexpected issues respectfully
“Asking detailed questions helps screen out untenable fits and gives insight into compatibility,” Thomas added.
How much can you earn taking on a tenant in retirement?
Setting a price that meets your financial requirements as a live-in landlord is vital, so make it count.
“Start by checking your area for local rental prices and what the market will bear,” Charnet said. “Ask the tenant for financial references as well to be sure they have the funds for a rental payment.”
While the tenant is also looking for a good deal and may be a great arrangement, hold your ground on the rental contract. “Protect yourself with proper wording in your lease document, just in case things go awry,” Charnet advises.
When calculating rent, retirees should factor in a few key metrics. “Include local rental market rates, the size and condition of the home, amenities provided (bathroom privacy, kitchen and laundry access, utilities, internet, cable TV), and the specific needs of the renter,” Thomas said.
Also factor in intangible factors like what tasks or assistance the roommate might contribute. “That includes yard work, chores, or companionship,” Thomas adds. “It's practical to research similar listings in your area or consult real estate agents to set a fair price that covers your costs and remains competitive and attractive. Start with Zillow for market rates and go from there.”
Once a price is agreed upon, set a contract and ensure it covers the necessary ground. “Safety, financial responsibilities, and expectations about day-to-day interactions must be clearly outlined,” Thomas said. Important details include:
- Rental amount, due dates, security deposits, utility payments, and shared food/groceries expenses
- Privacy boundaries — clearly state expectations for visitors, overnight guests, and shared versus private spaces
- Cleaning and household chore responsibilities
- Policies on noise and quiet hours
- Protocols for conflict resolution or mediation methods
- Written terms about termination and notice periods that clearly define either party's exit process
“Having the details prominently displayed reduces misunderstandings and fosters a peaceful living environment,” Thomas added.
How do you handle conflicts with tenants?
What happens if the renter finds out the roommate is a bad fit? Rely upon the contract, know your rights, and act quickly.
“If a retiree decides a roommate isn’t a fit, the first stop is the contract's exit clause, which should detail a clear process for giving notice, and, if needed, mediation or legal steps for resolving amicably,” says Dennis Shirshikov, a finance professor at City University of New York.
Then, treat the situation as business and act accordingly. “Start with a good and formal due-diligence discussion about the continuous issues, followed by a meeting with a well-laid-out plan, and unwinding the arrangement while doing the least damage,” Shirshikov advised.
Bottom line
Is the live-in landlord a trend, or is it a legitimate income strategy that’s here to stay?
Likely, it’s more of the latter, retirement experts say.
"Security and pensions often aren't enough to keep pace with inflation or other rising expenses,” Thomas said. “Many retirees turn to roommates as a practical, affordable solution to stretch their funds further.”
Beyond financial necessity, seniors may also seek companionship to avoid loneliness and isolation in retirement.
“Living expenses and loneliness together drive this surge in senior home-sharing, even when it includes strangers,” Thomas added. “This has definitely deviated from the past, and I'm still surprised at the rate it's happening.”
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