YOUR MONEY: Homeowners turn to roommates in recession

JOLIET, Ill. - Rob Martin hadn't lived with a stranger since he was in a college dorm 16 years ago. Now he has one roommate and is looking for another to share his three-bedroom, one-bathroom house.

JOLIET, Ill. - Rob Martin hadn't lived with a stranger since he was in a college dorm 16 years ago. Now he has one roommate and is looking for another to share his three-bedroom, one-bathroom house.

To make the house more appealing to renters, Martin does all the cleaning and installed cable television so if they were all sitting around, they would have more to watch. He also cranked up the thermostat to make it more comfortable, which sent his monthly heating bill soaring from $60 to $150. And he has invested lots of time carefully screening applicants to steer clear of "wackos" and "the clearly fraudulent ones."

Taking on the roles of landlord and roommate since November has been worth it for Martin, who'll reap an extra $700 monthly from renting two bedrooms.

"It has a lot of positives, it's an extra $6,000 a year when I make $40,000," he said, after deducting his higher costs. "This just makes it a little easier for me to pay down my credit card bills. I'm current on my gas bill as opposed to the end of last winter when I was delinquent."

Faced with layoffs, pay cuts, divorces or an inability to sell homes that are too big or too expensive to maintain, homeowners are popping up in classified ads offering to sacrifice their privacy for a stranger who'll help them make ends meet. They're willing to trade master bedrooms, refrigerator shelves and first dibs on the bathroom in the morning for boarders who are employed.


Chris LaRocco used to be in the mortgage lending industry, and his five-bedroom Batavia, Ill., home has a finished basement with a bar, a backyard hot tub and cherry cabinets in the kitchen. Now unemployed and unable to sell the house despite dropping the $649,000 asking price to $624,000, he's looking for a renter, but one whom he'll trust to be around his children. He has advertised the room for $645 and like others, seeks a professional with a steady job.

"I just have to make sure it's someone who's decent," LaRocco said. "I'm taking money out of my savings every month to pay the bills. I'm looking for a job, but in this economy, it's tough."

Taking in a renter requires some mental gymnastics, as boarders bring not just their personal belongings, but also their circle of friends, family and their emotional baggage. Finding the right one requires quite of bit of vetting, separating the legitimate prospects from scammers who pose as interested tenants.

Martin's friend, Jennifer MacKenzie, recently advertised a spare bedroom for rent in her home, and found a tenant once she dropped the rent from $525 to $450 a month. But one of the first e-mail responses she got was the same one sent from a different e-mail address to Martin for his Joliet listing.

Typically scam e-mails contain misspellings and punctuation errors and say they are from foreigners seeking to rent the space sight unseen. They send a cashier's check for more than the rent and security deposit.

The scammer then asks the homeowner to wire back the extra funds, and it is only after the wire transfer that the landlord finds out the initial check was a fake.

Such scams are so prevalent that six months ago, Dan Daugherty, founder and chief executive of, launched a separate site,, that tracks and prints the various fraudulent e-mails being sent to people who advertise for roommates and tenants.

"We're seeing a lot more landlords entering the market because they cannot sell their homes," Daugherty said. "A lot of landlords are new to this so they don't understand what goes on with a property."


Maureen Meehan, who lost her software sales job in December and remains jobless, decided to put her reservations aside and begin looking for someone to share the two-story, four-bedroom Colonial she and her 17-year-old son have called home for the past nine years. Neither she nor her son are thrilled with the idea, but she figures her strapping son will help keep things safe and the money might allow them to keep their home.

"I woke up and thought I don't think I'm ready to lose my house yet," she said. "If it affords us the opportunity to not put the house on the market and save it, I think we'd be foolish not to try."

She's open to sharing the kitchen, part of the living room and possibly a bathroom with someone who can also take advantage of the home's wireless Internet and cable television.

But she notes, she's looking for a boarder, not a new best friend, so she has decided the home's family room will remain just for her family.

"I'm not looking for someone to sit on the couch next to me," Meehan said.


INITIAL MEETING: Meet the prospective boarder the first time in a coffee shop, not in your home.

GET REFERENCES: Ask for several business and personal character references.


CHECK THEM OUT: Do a background check, especially if you have children in the house. Search for "background check" to find a company. Some even offer contact information on past neighbors. To make sure you're checking the right person, obtain the applicant's Social Security number and any names the person has used, including maiden names.

CHECK FOR SEX OFFENDERS: Many states have online information.

BEWARE OF SCAMS: Avoid doing business with anyone who says they'll send you a cashier's check for more than the rent and asks you to wire back the difference. Chances are the check is counterfeit. Beware of anyone who wants to rent your room without inspecting it.

USE CONTRACTS: Lease contracts are available online.

SET BOUNDARIES: What rooms will be shared? What about a shelf in the refrigerator and Internet privileges?

IT'S BUSINESS: Remember this is a business transaction. You'll have to hold your boarder accountable if they're late with the rent. And rent is taxable on Schedule E, so keep good records.

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