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An easy way to increase freedom and independence with little effort
A friend of mine is currently living with his brother and a friend. They’re both paying rent to him, while he uses it to pay off his home. While they’re helping him pay off that home, he’s in the process of buying a second property to expand his real estate holdings.
But if you’re not trying to acquire more property, living with roommates has other benefits, which we will discuss below.
1 – Decrease your living expenses.
Add some roommates if you’re unhappy with what you’re paying towards rent/mortgage and want to pocket some extra cash.
There are plenty of things you can do with the extra cash flow. Investing is my number one favorite thing to do with extra cash flow. Pay off debt, save for a future venture, or increase your disposable income.
2 -Pay your home off faster.
Whether you consider the average 15–30-year mortgage a pro or a con, having roommates can help you cut the years down significantly, equating you with more financial freedom.
A pro of paying your home down faster is you pay significantly less in interest fees.
Depending on your interest rate, you could end up paying 2–4 times the purchase price of your home due to interest.
The quicker you pay it off (and the more principal payments you make), the less money you’ll spend paying off your house.
It’s better to pay for one house at the end of your mortgage life instead of multiple.
3-Increase your passive income.
The best part of having roommates is the passive income they give you for rent. You technically don’t have to do anything to earn this money except exist.
If you choose the right people to live with, the experience will be easy, and you won’t constantly deal with additional stressors from living with others.
4 -Add economic strength.
If you lost your job or an income source, having roommates live with you can take some of the stress off your plate because you have that extra passive income flowing in.
When you have roommates, you might not even have to dip into your emergency fund (or at least not as deep).
If you have a garage, you could rent out that to bring in additional income. Who knows…you might decide to become a full-blown host because of how little effort is involved (when you choose the right guests).
Break Stereotypes
You don’t have to be in college or under 40 to live with roommates. There is no age limit. A woman in her 50s has spent much of her life living with others.
The benefit?
She lives for free, has grown a healthy nest egg, remained debt-free, and created lasting friendships.
Read An Alternative View On Living With Roommates
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.