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Since 2003, Dan Green has been a leading mortgage lender and respected industry authority. His unwavering commitment to first-time home buyers and home buyer education has established him as a trusted voice among his colleagues, his peers, and the media. Dan founded Homebuyer.com to expand the American Dream of Homeownership to all who want it. .

Colonial Home With Extra Room - Boarder Income

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What Is Boarder Income?

Boarder income is a homeowner’s earnings from people who rent and live in spare rooms or sections of a home.

A Longer Definition: Boarder Income

In real estate, boarder income is the revenue a homeowner earns for housing tenants, known as boarders, within their residential property. Boarder income is most common in single-family homes where extra rooms or separate living areas are rented.

Unlike traditional rental income, which is earned when an entire property is leased to a renter, boarder income refers to rent payments received when the renter cohabitates with the owner.

The most common boarder income scenario is when a homeowner rents out one or more spare bedrooms to students, professionals, or short-term lodgers, and shares common areas of the home, like the kitchen and living room, with the boarders.

Two other common boarder income scenario include renting a self-contained basement unit or accessory dwelling unit to a renter, and renting a room to a family member through an informal rental agreement.

Boarder income is a common way for homeowners to supplement their household income, offset their mortgage payments, or cover home maintenance costs. Boarder income can also be used to help qualify for a mortgage.

Homeowners who receive boarder income are expected to declare it for tax purposes and ensure their home meets applicable local housing laws and standards.

Boarder Income: A Real-World Example

First-Time Home Buyer Stories: Boarder Income

Consider the case of a first-time home buyer who buys a property in a college town with an additional bedroom over the garage, equipped with its own bathroom and living space. The room presents an ideal opportunity for the buyer to house a college student needing housing and generate monthly income that offsets the home’s mortgage.

The homeowner sets up the room comfortably and offers it for rent.

The arrangement is mutually beneficial: a student gets affordable and private accommodations near their campus and classes, while the homeowner receives boarder income to cover some or all of the mortgage and reduce financial burdens.

Frequently Asked Questions About Boarder Income

What constitutes boarder income in real estate?

Boarder income is the money received from individuals renting a room or space within a homeowner’s residence. Boarder income differs from standard rental income, where an entire property is leased out.

Is boarder income taxable?

Yes, boarder income is typically taxable. Homeowners are expected to declare boarder income on their tax returns and might be eligible for certain tax deductions related to the rented space. Consult with an accountant.

Will boarder income help with a mortgage application?

Yes, some mortgage programs such as HomeReady and Home Possible consider boarder income as part of a home buyer’s mortgage application. FHA loans also consider boarder income.

Are there legal considerations for earning boarder income?

Yes, homeowners should be aware of local zoning laws, rental regulations, and housing standards when renting out part of their residence. It’s crucial to ensure compliance to avoid legal issues.


  • November 20, 2023: Added video
  • November 19, 2023: Original publish date

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       Boarder income is a homeowner's earnings from people who rent and live in spare rooms or sections of a home.

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