Make Money Off Renting Apartments

The greedy / business-minded side of me immediately thought about whether it would make sense to switch to a two bedroom apartment and try to rent out the extra bedroom. Below were the pros and cons that I thought about.

Advantages
Rent Charges - The rent for my one bedroom apartment is currently $995 and the two bedrooms are running for $1,350. This means that as long as I can charge more than $355 for the extra bedroom, I will come out ahead on rent alone.

Utilities - I can structure a contract so that the person that rents the extra bedroom share the utility bills. This will further cut down on the utilities we spend since there are some fixed ones like internet and cable TV.

Sell some furniture - If the new tenant has some furniture they want to bring into the apartment, it will allow us to sell the furniture that we have for some cash. Sure, we would need to buy it later, but I doubt we would be spending more money than the price we sell the same furniture at.

Disadvantages
Extra Body Count Inconvenience - It is pretty obvious that there will be much inconvenience when you are living with someone else. Everything is fine until the first time there is a dispute about something that you and the people you live with don’t agree on.

Extra Management - Managing the rent from the tenant and all the additional hassle (fixing his portion of the room if something goes wrong etc etc) might not be worth the $200 or so a month I project making if everything goes smoothly.

Risk - $200 dollars mentioned earlier might sound like a good chunk of cash each month, but you run the risk of finding a dirty tenant (which might affect the security deposit you are able to get back later), or one that always pay rent late if at all.

The $200 dollar profit is only applicable for months that we can find a tenant. For each month that we don’t have another person living with us, we are losing $355 plus a little bit of extra utilities (e.g. A/C, heat) that we use since the two bedroom apartment has extra space.

Legality Issues - I’m not even sure if it is even legal to rent out a bedroom when I’m also only renting the apartment. Assuming there are no legal issues, there are tax issues. If I don’t file taxes, I am avoiding taxes. If I do file taxes, the $200 profit will quickly become more like $100.

Conclusion
After some quick analysis, it seemed to me like it was not worth the trouble and risk. This is almost like renting an apartment with a friend to save money, but yet with subtle differences. It is a fusion between renting with a friend and having a house that you own and renting one room out. Has anyone else done this? Perhaps you can share your experience on whether you think it was worth the trouble.