How would you like to have a friend who pays your electric bill and fills the gas tank of your car a couple times a week? Instead, maybe he makes the payments on that new car in the garage. How can you do this? All you need is a roommate you like, who respects you and your home, and pays the rent on time.

We've all heard of the situation where two people live together as roommates, usually to save money. Many of us may have done this ourselves when money was tight, or while in school, or in order to focus completely on some shared experience. However, the Roommate situation I'm talking about is a little bit different. It's about accepting a lifestyle that can make a real difference in your future. It's a philosophy of taking physical living space that we control, and using it more efficiently in such a way that it is converted into a monthly income stream.

It's not groundbreaking, nor is it difficult. At it's most basic, we merely rent out a room in our home. It's a very simple idea, and many people do this without giving it a second thought, either through necessity, convenience, or for other personal reasons. The real benefits come out when you expand the idea a little more; when you apply a few unconventional twists on that basic idea.

For example, let's assume you are thinking of buying a modest two bedroom home for yourself. You expect to have a house payment which is approximately the same as what you are currently paying in rent, maybe just a little bit more.

This is the situation of many first-time home buyers, and you could make this choice as well. Instead, what if you decided to buy a larger home, with maybe four bedrooms? one with a three car garage and a nice back yard? Then, instead of living all by yourself, you go find three single mothers, each with one small child, all about the same age, and rent each one a room in your house.

This can be attractive to those mothers for several reasons. They will be living in a nice home with a place for their son or daughter to play. There will be someone to play with. It will cost less than renting a home of their own. They have someone to share baby-sitting with, and someone else who is facing some of the same kinds of challenges in life.

If you look at the numbers, you'll notice that by renting three rooms at a fair rent figure, you'll be earning enough to pay most, possibly all of your mortgage payment. Rents and home prices vary quite a bit from place to place, but do a little research and you will find that renting three rooms will normally provide more cash flow than renting an entire house. In fact, in most areas of the country, you can control more real estate for your money this way.

It's true that this house would cost more than the one you were originally thinking about, but it surely would not cost double. In reality, you might pay as little as ten to twenty percent more. You also might want to do some minor improvements to make the home more conducive to effective sharing.

In addition, you will need to organize things like utilities, kitchen use, parking, and of course, find roommates who you want to live with, who can get along well with others, and who will take care of your house and pay their rent.

On the other hand, they will be making the mortgage payments, and remember, it is still your house. You choose who you invite in to live with you, you set the rules, and you choose who leaves.

And the REALLY interesting thing is, once you set things up correctly, you can go buy another house and do it all over again. Then, you'll have two homes, maybe even in different cities. Maybe even across the country.

This isn't just a theoretical example. I've been doing this for many years as a way to leverage buying rental real estate. I've also made good friends this way. And I've learned a great deal about how to do it effectively.

Targeting single mothers is just one of many possible variations on this theme. You can apply this to college students, people who don't want to own a car, those who love to cook and want a really nice kitchen, those going through a divorce, even people just getting out of prison. Each group would have it's own unique benefits and challenges, and as long as you learn what they are and how to deal with them, you can build a sustainable, growing real estate investment business.

Next time, I'll tell you about some of the things I do that makes it simple and efficient, and also some of the bonuses that come from doing business this way.