By now you surely have heard that low (or no) retirement savings is a problem plaguing retiring baby boomers. A growing number of older adults, women particularly, are finding that living with housemates is a solution that not only saves money, but it’s fun.
Brings to mind that popular 1980s TV show “The Golden Girls,” featuring the escapades of Dorothy, Blanche, Rose and Sophia, doesn’t it?
Why bunching up is a hot trend
Taking on a platonic roommate is a hot trend among older adults, says Next Avenue. Driving the trend are “the three ‘big C’s’: cost, companionship and community.”
Four million women age 50-plus live in U.S. households with at least two women 50-plus — a statistic that is expected to rise. According to the National Center for Family & Marriage Research, 1 out of 3 boomers will probably face old age without a spouse.
Isolation affects older people particularly, and the growing divorce rate among older Americans intensifies that. Sociologist Susan Brown, of Bowling Green State University’s National Center for Family & Marriage Research, was interviewed by National Public Radio:
“Back in 1990, fewer than 1 in 10 persons who got divorced was over the age of 50,” says Brown. But today, “1 in 4 people getting divorced is 50 or older.”
Companionship is a great bonus, but let’s talk about saving money. How much you save depends on two things: what you can charge, or pay, in your local housing market, and your share of overhead expenses like utilities, phones, cable, gardening and landscaping, and housekeeping. Housemates may also agree to share food and alcohol costs.
You can get an idea of what’s reasonable to pay or charge for housing by reading classified ads for your housing market. On Craigslist, for example, look in the housing category at these subcategories: rooms/wanted, rooms/shared, housing/wanted and apts/housing. Local newspapers’ classifieds are another place to look. Pay attention to the difference in rents in various neighborhoods.
How housemates share costs
There’s no rule or formula for sharing costs. Generally, housemates split costs down the middle or negotiate an agreement.
In shared households, a housemate typically will pay a slightly larger share of the rent for a larger bedroom or one with extra amenities, like a view or more storage space. If you own the shared home, it’s assumed you’ll pay the costs of the home’s repair and upkeep unless you negotiate an agreement that says otherwise.
Renting a room
If you are a homeowner or apartment dweller who wants to rent out a single room, you typically won’t be able to charge as much as you can to a housemate who has full run of the home. The more restrictions you impose, the less you can ask in rent. The tradeoff is that you can retain more privacy and space for yourself.
In a shared home, housemates are equals. When renting out just a portion of your home, you’re the boss. You set the terms of the agreement. You might, for example, restrict a renter to using the kitchen or dining area at certain hours only. Or you may limit access to other parts of the house; you might ask a renter to watch TV or entertain guests in her room, for instance.
Sharing utility costs
If you rent a single room as a tenant, your share of the overhead typically is included in your rent. That’s not always the case, though. Some landlords may charge a share of at least some costs, to discourage overusing heat, for example, or taking overly long hot showers.
With a housemate arrangement, expect to split up overhead equally or in proportion to your use of the home.
The agreements housemates reach are as varied as the housemates and their homes. AARP describes two arrangements:
Marianne Kilkenny, 63, owns a house-sharing coaching business in Asheville, N.C., and lives with three other housemates, all women, aged 48 to 69. Three of them pay $550 to $650 rent for a separate bedroom and bath. Kilkenny pays $900 a month, including utilities, to live in the home’s in-law apartment with a separate kitchen. Everyone shares living areas.
Another group, three women in Mount Lebanon, Pa., bought a home together with a joint mortgage. They consulted lawyers, accountants and financial planners first. AARP says:
Every month, the women deposit the same amount into their joint checking account to pay for utilities, property taxes and repairs. They each contribute a $100 gift card, with which they buy and share groceries — if someone entertains family or friends, she pays separately — and they occasionally eat together. They have house rules, including no overnight guests for more than seven consecutive nights, with built-in flexibility.
There may be barriers
Not that it’s always easy. An article by the American Planning Association lists some legal barriers:
In some cases, zoning and homeowners association rules make home sharing illegal. Covenants, conditions, and restrictions in towns like Harmony and Celebration, Fla., require that all members of a household must form a “single housekeeping unit,” excluding unrelated sharers. Single-family residential restrictions can run house sharing afoul of local zoning ordinances, and the federal tax code makes reporting income and deducting expenses for shares challenging. Where home sharing is not actually against the rules, it is often rejected because of narrow social constructs of “family unit,” “overcrowding,” and potential noise and parking impacts, or it is simply neglected.
How to find housemates
If you’re serious about sharing a home, you might explore some of these common ways to find housemates:
- Broadcast your interest among your friends.
- Run a classified ad.
- Send an email to friends asking them to share it with their networks.
- Put a note in a church, club or group bulletin.
- Post a note on a bulletin board at a local grocery or hardware store or coffee shop.
Other, safer options have arisen to help, however. These include a number of local organizations across the country that match people who are looking to share housing. Typically, the organizations screen potential housemates. Some specialize in helping seniors. Search for local programs through the National Shared Housing Resource Center’s directory (select your state).
In New York City, for one example: “The Home Sharing Program, a free service provided since 1981 by the nonprofit New York Foundation for Senior Citizens (NYFSC), allows adults in all five boroughs to either ‘host’ a roommate (if they have the extra space) or become a ‘guest’ in the home of a compatible match,” writes Chelsea Now.
The participants are screened by social workers. At least one must be 60 or older. Potential housemates can participate in supervised opportunities to become acquainted and can get help writing an agreement.
Another resource is Women for Living in Community, a network that helps women “learn about alternative models of community (co-housing, shared housing, etc.) and get guidance and support in creating those communities,” its website says. Its resources include a list of roommate matching services.
If “contract” sounds too formal, call it an agreement, but one key to a harmonious arrangement, whether you are renting a room in someone’s home or sharing a home with housemates, is a written contract that includes:
- All obligations for all parties.
- A policy on smoking.
- Whether pets are allowed.
- Any services to be included.
- The rent amount and when it’s due.
- Access, hours and any restrictions.
- Consequences for nonpayment.
- Causes for termination of the contract.
- Notice required before moving or terminating contract.
- Any additional expectations or requirements.
That’s not the only approach, however. Bankrate describes a Bay Area program that helps clients create a “living together agreement” that covers “everything from communication styles to how much furniture housemates get to bring with them.”
Choosing and screening housemates
Especially if you haven’t had a housemate in a long time, give careful thought to your needs and what you can and cannot live with, and learn about screening housemates. Here’s help:
- AARP’s article has questions to ask yourself about your requirements.
- Trulia gives 10 questions to ask a potential housemate.
- A Realty Times article on how to screen tenants can be adapted for your needs.
- Realtor.com tells how to run a credit check and criminal background check on a housemate.
- Ask Women for Living in Community for tips and guidance.
Would you share a home with people who aren’t family to save money? Are you doing it right now? Tell us by posting a comment below or on Money Talks News’ Facebook page.