Many cities throughout the world have exorbitant housing costs. However, some of them, such as Hong Kong, compensate for this by offering low-cost lifestyle options such as food and transportation. The Bay Area, on the other hand, does not appear to be following this pattern, with housing costs exceeding those of other areas such as food, entertainment, and transportation. Renting a spare bedroom is becoming more mainstream.
As a result, many of these people have joined the new practice of renting out unused rooms to help cover their living expenses. As a result, renting out your rooms has advantages and disadvantages, which I will discuss with you.
Renting a spare bedroom, as previously said, provides an additional stream of income that can help offset the additional expenditures of living in the Bay Area. A room in this neighborhood often costs $1,000 to $2,000 per month, which is a big increase in your income. In fact, if you have more than one spare room, you may rent them all out at once, boosting your monthly rental income dramatically.
You will be less stressed in other areas of your life, such as paying your bills or buying groceries, if you have this money. You could even be able to reward yourself more frequently, or accept your friend’s invitation to lunch out (which you have been avoiding to save money). It also adds to your income and diversifies your portfolio because it is a new source of revenue. This essentially means that if anything unexpected occurs, such as being laid off from your job, you will still be able to support yourself since you will receive $1,000 to $2,000 per month.
However, you would most likely be unable to sustain long-term just on rental revenue. Of course, by using Rentalios to price the accommodation appropriately, you might maximize your revenue flow. Overall, renting vacant rooms makes the most of the underutilized property and provides a substantial new stream of revenue that not only helps you cover your living expenses but also reduces your risks.
Interaction with Others:
Another advantage of renting out your rooms is the extra income. Depending on the renter and yourself, this could be a plus or a disadvantage. Some people may prefer living alone because there is less chance of arguments and confrontations (which I will get into with the cons).
If you’re anything like me, however, you’ll appreciate the extra companionship because living alone may have a negative effect on one’s mental health. When you rent out your room, you have the opportunity to meet new people and establish new acquaintances. In fact, learning new things from them may even help you extend your knowledge. For example, throughout your undergraduate years, you might have learned a few things about various topics from your roommates’ specialties.
This is especially true in the Bay Area, where everyone is working hard to achieve their goals and objectives in the ever-expanding tech industry. For example, you might be able to learn a few things about the computer business or even try new foods, as well as life hacks you never knew about or tried before. In other words, renting out your room not only provides you with more company, but it also allows you to expand your horizons by exposing yourself to different situations.
In addition, the company provides an extra set of hands in the house/apartment that can assist you with a variety of duties. For example, you would no longer have to struggle to bring in all of your groceries in one trip because you would be able to assist each other with this difficult effort. Not to add that you could cook for each other and save each other time because cooking for two people takes less time than cooking for two people separately (Kitchen Economies of Scale).
You might even get to try different cuisines as a result of this. If you have a pet, you may not need to stress about finding a sitter when you go on vacation because your housemate could look after your pet while you are gone. As a result, renting out your room could be really beneficial in terms of household assistance. Of course, this will rely on the terms of the rental agreement and your relationship with the tenants.
The first disadvantage of renting a room out is the additional duties that come with it. Consider the following scenario:
- You’ll need to prepare a room for the tenant.
- locate a renter
- Look for a platform to promote your room on.
- determine the optimum moment for you to rent out your room
- complete tenant background checks
- Among other obligations, create a contract or rental agreements.
In reality, you’ll have to put in some effort to determine the best pricing for your stay. This is because the incorrect pricing may dissuade tenants from applying for the room or cause you to lose money. Thankfully, Rentalios can help you identify the price ranges for similar rooms to yours, eliminating yet another burden from your to-do list.
Laws and Taxes:
When you rent out your room, taxes and laws are also imposed, which adds to your duties. For example, the room you’re renting out must adhere to certain rules for the tenant’s safety (these may differ depending on where you live).
As a result, you may need to make certain alterations to the space in order to comply with the legislation. Finally, the money you earn from renting out the room contributes to your taxable income. As a result, you may want to reconsider your pricing in case you end up paying more taxes and saving less money.
Finally, you’ll have to learn to share because the tenant will need to use the kitchen and living room as well. This, however, may not be a problem for you. If the correct structure is applied, this disadvantage can often be turned into a benefit. For example, one may establish a set of rules requiring members to notify one another when inviting guests over.
In fact, as previously indicated, you could cook for each other, which would save both of you time. Of course, some renters may be difficult to live with at times. However, because of the added obligations you will have, you may be able to avoid this by taking your time to interview and select the ideal tenant for your room.
Summary: What to Know BEFORE Renting Out Your Spare Bedroom
Many cities throughout the world have exorbitant housing costs. However, some of them, such as Hong Kong, compensate for this by offering low-cost lifestyle options such as food and transportation. The Bay Area, on the other hand, does not appear to be following this pattern, with housing costs exceeding those of other areas such as food, entertainment, and transportation.
If you have any questions about What to Know BEFORE Renting Out Your Spare Bedroom contact me today.