No matter how much you save for retirement and collect in Social Security, you might find that the income you have access to just isn't enough. And when we consider that a large chunk of seniors end up spending more on expenses in retirement than during their working years, the need for extra money makes all the more sense.

Of course, there are several routes you can take if you find yourself cash strapped during your golden years. You can get a part-time job, start a business, or aim to monetize an existing hobby. You might also consider downsizing to a smaller living space to free up cash for other things. But before you opt for the latter, remember that you can use your larger property to your advantage by converting it into an income source.

Senior couple standing outside a house.

IMAGE SOURCE: GETTY IMAGES.

These days, almost 11% of seniors rely on rental income to pay the bills in retirement, according to GOBankingRates. And while that's certainly a dependable means of generating extra cash, it can also be a risky move.

Benefits of renting out your home in retirement

First, the obvious: Renting out your home can result in a predictable income stream -- something many seniors need. As long as you have an airtight lease, you'll largely be guaranteed rental income while that contract remains in effect. And if you live in a desirable neighborhood, such as a major city or college town, your odds of finding a steady stream of tenants are relatively strong.

Furthermore, renting out a portion of your home might allow you to retain that larger property and build additional equity in it, as opposed to having to unload it. And that, in turn, could buy you more financial flexibility even later in life.

Finally, there's a good chance you'll find that being a landlord is less time consuming than going out and working several shifts a week at a local business or running your own venture. Sure, there will inevitably be times when you need to step in and fix things or deal with tenant issues, but for the most part, you probably won't be looking at 15 hours of work or more per week to manage that income source.

Drawbacks of renting out your home in retirement

While there are plenty of good reasons to become a landlord in retirement, remember that in doing so, you alone bear the cost of maintaining a larger home. And that cost could grow exponentially as your property ages. Also, keep in mind that as you age, your ability to tend to household needs might wane. And the more you're forced to outsource home maintenance items, the more expensive they become.

Then there's the general risk of having a tenant to consider, regardless of whether you're retired. When you rent out your property, there's always the chance that your tenant might damage it and leave you on the hook for the associated bill. And while you can and should collect a security deposit to mitigate this risk, it might not be enough to offset whatever expenses you wind up facing.

Another thing to consider is that renting out a portion of your home means losing out on privacy at a time when you might want it. After all, during retirement, you're apt to spend more time at home than you did during your working years. And having to hear somebody else's music (or footsteps) day in and day out might not sit well with you.

Of course, much of this assumes that you're renting out a home you also live in. If you own an additional property that you wish to hang onto, it pays to turn it into an income stream rather than have it serve as an absolute expense. But when it comes to your own home, be sure to weigh the pros and cons of living there solo versus taking in a tenant. Along these lines, consider whether unloading that property and moving someplace smaller might have the same effect on your finances. It could very well be that renting out your home is a great decision, but don't jump into it without carefully evaluating the pluses and minuses involved.

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