A CASE FOR RENTING YOUR STARTER HOME

Earlier this year I interviewed Jennifer Pollock, CRS and a local Realtor, about the first time home buying experience. The show was geared toward young adults and college students wondering about the possibility of owning their first home.  As Jennifer shared some great tips and resources during the interview, our discussion turned toward what to do when you have a starter home and are either ready to upgrade or have found that you have become a victim of the recovering economy.  Here is what was discussed:

Guest Jennifer Pollock: I just met a young man [who] bought a four bedroom, three bath home and his friends are basically paying his mortgage.  He’s paying about $200 a month while his buddies are paying him $600 each.

Host Inger Johnson: And he’s getting equity in the tax rate?

Guest Jennifer Pollock: He’s getting the tax write off and he’s getting the equity and they’re paying for the privilege of living with him and he’s really not even paying the mortgage. So there’s things to think about and yes you could buy a home with a friend and split the cost.

In this case, the young man decided to save on his mortgage payment by renting to friends.  Not that renting rooms is a new idea but for a young adult or college student, it’s an idea that can be overlooked.

In the case of someone looking to upgrade but possibly having trouble selling the home, renting the home is an opportunity to save money by eliminating the cost of paying two mortgages (or a mortgage and a rental).

For those looking to purchase their first home but wonder if they can maintain mortgage payments, renting out a bedroom or two could make all the difference for you.

Do you have other ideas that you’ve implemented or have seen others do to help them save on their mortgage? Share them here.