Home Sharing to Reduce Costs in Retirement

Jane Wollman Rusoff,

AARP

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En español

Published March 10, 2025

collage of a woman's face and images of her home

After her first husband’s death, Lise Beale brought in a steady supplemental income and “made wonderful friends” by renting out the master bedroom in her riverfront Boston condo.

Photo Collage: AARP; (Source: Courtesy of Lise Beane (4))

When Lise Beane’s husband, Paul, died suddenly in 2002 at age 55, he left behind $60,000 in debt and a panicked wife. The couple had been married for 25 years, living comfortably in a Boston condominium. They had no children. Now Lise, who was working part time as a freelance writer, was financially insecure and facing an uncertain future.

“Living alone and in debt for the rest of my life was a horrible thought,” she recalls. “I was trying to keep a roof over my head.”

At 55, fearing for her financial stability, Lise devised a plan: She would seek out rent-paying roommates, targeting the steady stream of young women who came to Boston to study or teach.

Moving into what had been her home office, Lise advertised the condo’s large master bedroom with its Charles River view on Craigslist for $1,000 a month. She offered what she called a “concierge for one” service, helping her tenants, mainly international students, get to know Boston and providing advice on how to get around and where to bank and shop.

Over a decade, until she retired at 65, Lise earned about $120,000 from house-sharing. The rental income helped her cover her mortgage, condo fees and real estate taxes while still saving for retirement.

A year later, working with a real estate agent who had been one of her renters, she sold the condo – which she and Paul bought in the 1970s for $50,000 – for just over $1 million.

“That 10-year window of renting allowed the condo to substantially increase in value,” she says. Now 78, she and her second husband, Doug Walther, split time between condos in Cape Cod and St. Petersburg, Florida, that she bought with the profits.

To be sure, not every widowed spouse or empty nester who brings in tenants will reap that kind of return. But turning vacant rooms into income can provide a “windfall” for retirement, says Ken Dychtwald, a gerontologist and the founder of Age Wave, a consulting firm that focuses on aging-related issues.“For the majority of the population, when retirement planning, some type of house- or apartment-sharing is a wise consideration because of the financial savings, as well as the benefits socially,” he says.

Here are four potential benefits to making house-sharing part of your retirement plan.

1. Help with housing costs

Mean housing costs for Americans 65 and older, including mortgage or rent, property taxes, insurance, utilities and maintenance, added up to $1,787 a month in 2023, accounting for 35.7 percent of retirees’ spending, according to the U.S. Bureau of Labor Statistics.

Taking in a tenant whose rent covers a share of these costs can be a financial lifeline for older adults “who are living on a fixed income and worried about future livelihood,” says Linda Hoffman, president of the New York Foundation for Senior Citizens, which offers a house-sharing matching service.

The rental income can help you cover mortgage payments, household bills and living expenses such as groceries, clothes and travel, giving you financial flexibility to keep growing your savings. That, in turn, can provide a bulwark against health care and long-term care costs as you age.

“It used to be that people were just looking for companionship. Now, the primary benefit for wanting to share is financial,” Hoffman says.

2. Help to age in place

Three in four American adults want to stay in their home or community as they age, but fewer than half believe they’ll be able to, according to AARP’s 2024 “Home & Community Preferences” survey. House-sharing can help improve your odds of being able to age in place.

Along with lowering your fixed housing costs, income from tenants or roommates can close gaps between your spending needs and what you bring in from savings, investments and Social Security, helping you maintain your pre-retirement lifestyle.

“You need to look long-term — you don’t want to run out of money,” says Penelope Tzougros, a financial planner in Waltham, Massachusetts, specializing in planning for and maintaining financial security in retirement.

The extra money can also help pay for home repairs and maintenance you can no longer do yourself or improvements to meet changing needs.

Kathleen Rehl, a certified financial planner and author of Moving Forward on Your Own: A Financial Guidebook for Widows, says one of her clients used income from renting out a room “for home modifications — installing grab bars, ramps and a security system.”

3. Tax advantages

Rent is taxable income that could push you into a higher tax bracket. But house-sharing offers a host of tax breaks you wouldn’t get living alone.

The IRS says you can deduct the “ordinary and necessary expenses” of managing and maintaining the part of the home where housemates live, such as advertising, repairs and utilities.

You can also deduct depreciation of the room or rooms you rent out. If your housemate uses part of their space as an office, you may be able to deduct business expenses, too.

“Those deductions are a way to maximize the rent from sharing your house,” Tzougros says.

You can also deduct a part of your property taxes and homeowner’s insurance, proportional to how much of the home’s area is rented out. And if your landlord expenses amount to more than the rental income, you can claim a tax loss that can be carried forward as a deduction down the road.

4. Quality of life

House-sharing can have benefits far beyond just boosting your bottom line, as Lise Beane discovered.

“By renting for those 10 years, I made wonderful friends that brightened my days in a hundred unexpected ways,” she says. “I was supplied with an endless stream of fascinating roommates. It was a real adventure.”

For widows, widowers and singles, taking in tenants can alleviate the isolation and stress that can accompany aging solo (and can be hazardous to your health).

“People are realizing that having some companionship with a housemate is a financial win, a social win and, to some extent, a spiritual win because you’re likely to feel better than living by yourself,” says Dychtwald.

With a housemate, you’ll have someone there to give you a hand with chores. If you have pets, you’ve got a sitter when you travel. If you fall or suffer a health emergency, there’s someone around to offer aid or get help.

“You may be fine now, but anything can happen,” says Tzougros. “If you look at the possibility of home-sharing early enough, before you’re compromised, you can make intelligent choices.”

And some rental relationships, like Beane’s, blossom into friendship. Rehl cites a widow in her community who started renting the upstairs of her house, plus kitchen privileges, to another widow.

“It’s working out great. They’ve begun doing things together socially,” Rehl says. Plus, “the rent gives the house owner more money to do cultural things she likes.”

How to Search for a Housemate

Even if you mainly do it for the money, remember that house-sharing means just that — you’re sharing your home. When it goes wrong, “it’s really messy,” warns Michael Hackard, a Sacramento, California, attorney who has represented older adults victimized by financial abuse, including in house-sharing situations.

Finding the right roommate requires due diligence. Sean McGrail co-founded Home Sweet Homeshare, a matching service for older homeowners and younger people seeking affordable lodging. He offers these tips for finding compatible, reliable, trustworthy tenants.

Seek tenants from caring and service professions such as teaching, nursing and public safety. Post fliers in schools, libraries, police stations and firehouses. If your target is students, connect with the housing departments of local universities.
Verify your potential housemate’s employment and income.
Conduct three interviews with the applicant: a phone call to discuss the basics, a video call with a tour of your house and an in-person meeting.
Ask for at least three references, including a prior landlord, a previous employer and a friend.• Ask about health and lifestyle. Do they have pets? Smoke, drink or use recreational drugs? Have food restrictions or a chronic medical condition? Do they intend to throw parties or have overnight guests? Do they want to socialize with you or, as McGrail puts it, live more like “two ships that pass in the night”?
Use a background-check service such as Avail, Checkr or TransUnion SmartMove to determine if prospective tenants have a criminal record, bad credit or a history of financial problems. (Some home-share matching services do this for you.) You may be able to pass the cost on to the applicant.

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Jane Wollman Rusoff is a New York-based writer and editor who has contributed to The New York Times, Esquire and Good Housekeeping, among numerous other publications. She is the author of five books, three co-written with Tonight Show creator Steve Allen.