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.
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).
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?