Renting Rooms to Family Members

Do you own a big single-family home with only a single family living inside? Well, congratulations, that’s a fantastic feat.

The follow-up question is, how is your financial situation looking? Chances are, it is not looking too good.

The bait and switch. Who told Americans we all deserve to live in 2,000-square-foot, 4-bedroom, 3-bathroom homes?

We Make $650/month in Passive Income

Whoever pushed this dream upon us is very smart and very rich. The single-family home is a myth they sold into in the 1950s. 

Before the industrial revolution, we owned farms that served a purpose. We then moved to the suburbs to expand our space but reduce productivity.

The current situation. Today, we are drowning in mortgage and rental expenses because of the single-family single-house dream.

Your housing expenses must be under 20% of your take-home income to have a chance in this world financially.

Ideally, you would pay zero housing costs out-of-pocket. So, how do we achieve these incredible numbers and start building wealth?

Living Passively Overseas 105: Rental Income

I am a massive fan of renting rooms. By renting rooms, my wife and I paid off $77,000 in debt and built a $200,000 dividend portfolio—in less than four years.

Why rent rooms? Renting rooms for strangers or Airbnb guests is only for some. In fact, 90-95% of people will never rent rooms.

America told us we could become a (standard, average) regular 9-5 employee yet have a great spouse, wonderful house, amazing cars, and travel around the country.

This employee-has-everything lie has kept the American population poor for the last 50 years. Now, with inflation, it is accelerating our plunge into wealth destruction.

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We simply cannot afford to live alone in today’s day and age. We must save and invest 50% of our take-home income every month. Yes, a savings rate of 50% is mandatory if you want any chance of leaving the workforce.

Renting rooms to family. Where do we start our financial journey? Well, it’s to rebuild the American family. 

Family relationships used to be the strongest bonds one could find. We would never think of kicking kids out at 18 or leaving our siblings in an apartment alone.

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Our parents are living and dying alone, without their children’s support. Daycare is now raising our kids because both parents work.

We can ALL become wealthy by working together. Let’s look at some scenarios where everyone’s a winner.

1. Your brother or sister rents an apartment. You can move them in, cut their rental cost by 50%, and still pocket a lot of money. Everyone wins.
2. Two families move in together. Even if both families own a home, they can move in together. This reduces both families’ costs, and the other property earns rental income. Everyone wins.
3. Parents move in with you. Your parents should have some kind of pension or social security. They can also rent their home and move in with you. Everyone wins.
4. A college kid moves in. You may have a niece or nephew that wants to go college away from their parents. What a great time to build strong bonds. Everyone wins.

The goal of renting rooms. Most people miss the purpose of renting rooms, that’s why they are not open to the idea.

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The purpose of renting rooms is to fund your money system, otherwise called your income-investing portfolio. 

Once you have an extensive income portfolio, you have more options than your mind can imagine. Let’s look at my income portfolio.

My wife and I have over $200,000 in our portfolio. More importantly, it pays us over $1,500/month in dividends.

Once you have this much money in your portfolio, it runs itself. It will simply keep growing as you keep reinvesting a portion.

Renting rooms the correct way. Your entire life will change as soon as you tap into the sharing economy.

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Renting rooms to family members will give you a new perspective on what you can achieve with teamwork. However, you must understand how to be a good landlord and roommate.

Treat this like a business, and people will not get their feelings hurt. Generate a month-to-month contract that spells out the rules and expectations.

Read “The Book on Managing Rental Properties” to understand how to manage a rental. However, renting rooms isn’t Burger King; you can’t have it all your way.

You have to give and take as a landlord and roommate. You should provide them with cabinet space in the laundry room and kitchen.

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They may play music louder than you like or leave the TV remote in the wrong location—deal with it. Don’t blow a good thing over fake OCD syndrome.

Getting along with family. The best way to survive having roommates is to look at your bank account. 

Never kick out a family member that gels with you. If they are quiet, respectful, and pay rent on time, keep them forever.

Let them know how they invest the rent money because they may want to follow the same path. You’ll succeed more if both parties benefit and grow financially.

5 Takeaways from “How to Invest in a Mobile Home Park”

America tricked us. America tricked us into believing we could all own a single-family property with only one living inside.

The winners of this lie are banks, mortgage companies, credit cards, and student loan agencies. We all live in debt because we cannot afford the houses we purchase.

The longer we live this lie, the more unhappy we become. Renting rooms is not the sexiest thing on Earth.

Debt-Free? So, What’s Next?

Conclusion. However, it is the best money you can find once you discover an excellent match. You know what family members would be a good fit for your household.

Seek these family members out, and pitch them the idea of financial independence. Let them do a test week in your house so that you can feel the environment together. 

Life is about compromise. You only need roommates for a season (3-5 years). After that, your investment portfolio will do everything for you.

The sooner you build your assets, the faster they can set you free. Stop believing the lie about single-family houses, and start building wealth. Good Luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing