5 Questions to Ask Before Getting a Roommate to Help Pay Your Mortgage

Getting a roommate might help you pay your mortgage loan off early, avoid foreclosure, or just put a little extra for your savings account. But before you put that ad on Craigslist, ask yourself the important questions.

Here's what you need to think about:

1. Where will you look?

If you already have a roommate picked out, and they're into moving into your place, you’re ahead of the game.

But if you need to find one, do you ask a friend? Post on Craigslist?

You’ll want to interview all your candidates to make sure they’re someone you could live with. And once you find someone, you still need to do credit and background checks.

That might seem excessive, but there are some scary people out there.

2. What happens if your roommate bails?

Your roommate probably doesn’t plan on living with you forever. So what happens if she has to move out? Will you be able to afford your mortgage and utilities without the extra help, or will you be in hot water?

3. How much will your roommate pay in rent and utilities?

It’d be great if your new renter would pay your mortgage and then some. But is that realistic?

There are some things you should consider before setting a rental rate:

  • How much are similar rooms renting for in your area?
  • Are you close to public transportation, downtown, or another desirable area?
  • How much do you expect your utility bill to go up?
  • How much of the house will your roommate have access to?

4. How will you finalize an agreement?

Even if you’re living with your best friend, you still need to set all the expectations up front, in writing. You can download a standard agreement online.

Or, if you want something more detailed, you can have a lawyer draft one for you.

Be clear about all your expectations, not just money. Are pets allowed? What about smoking? How many nights per week can your new roommate’s girlfriend stay over before she’s officially a third roommate?

Spelling it all out up front, and putting everything in writing, will help protect you and your roommate.

5. What are the tax implications?

Even if you’re renting to your best friend, you’re officially a landlord. So you have to declare the rent as part of your income. And it’s not always as easy as it sounds.

Did you get first and last months' rent upfront? Is your roommate paying part of the rent in services (painting, fixing your car, childcare, etc.)? Did you pay to advertise your rental space? Visit the IRS website or check with your accountant to make sure you’re filing your taxes correctly.

Once you've answered all those questions, you should be able to decide if having a roommate is worth it.

One thing we don't recommend is getting a larger house and depending on a roommate to cover a higher mortgage payment than you would be able to afford on your own. Ultimately, you're responsible for your place, and you don't want to depend on someone else for financial security.

And you'll need to remember that, once a lease is signed, your roommate has equal rights to live there. Making them feel like a second class citizen will get ugly fast. Are you good at sharing?

Having a roommate can be fun! Just make sure you know what you're getting into.