Is Your Extra Room an Untapped Revenue Opportunity?
More homeowners are renting out their unused bedrooms to supplement income—to the tune of 33.6 million!
That’s the number of extra rooms available across the country, according to a recent Finder.com analysis of U.S. Census Bureau data. Assuming each of these rooms could be rented out for $100 a week (a rock-bottom rent in many markets!), homeowners all told could earn $174 billion each year.
The breakdown, based on Census data, is as follows: there are 357,032,421 bedrooms in the U.S., and 323,391,100 people, leaving a surplus of 33,641,321 rooms. The total number of spare rooms is likely to be even higher, since many couples share a bedroom.
Where are all these available bedrooms?
Florida leads with 3,026,887 bedrooms, according to Finder.com, with Pennsylvania, Michigan, Ohio, and North Carolina rounding out the top five.
The average homeowner renting out an extra room, Finder.com’s analysis shows, can expect to gain $5,000 a year in rental income—an amount significant enough to pay down a mortgage.
Renting out an extra room is not decision to be taken lightly, however. Be sure to:
• Check with your accountant for the tax implications of the extra income and how to handle relevant tax payments.
• Research relevant county or state laws surrounding letting spare rooms.
• See if the terms of your lease allow subleasing of rooms, and if there are relevant local regulations.
• Make sure that your home insurance policy covers tenants, as well.
• Do a background investigation of potential tenants. Interview them in person and ask for financial records that demonstrate their income.
• Request a rental bond and two weeks’ rent in advance—this will offer you some security if your tenant proves unreliable.
Your real estate professional may also be a resource worth consulting.