The Burrow
Mar 12, 2025
If you’ve just stepped into the housing market for the first time, or you’re thinking of moving rental properties, you’ve probably noticed just how expensive both rent and housing prices can be – in fact, the globe has been experiencing something of a housing affordability crisis in recent years, and it doesn’t seem to be disappearing any time soon.
Naturally, this has led to many tenants in the rental space looking for ways they can supplement their income to cover these higher prices, including sub-letting spare rooms that they might not be using.
Ideal for covering part of your rental payments and giving you more flexibility in how you spend your money, if your state and your tenancy agreement allows it, sub-letting can be a fantastic way to do more with your money.
Definitely make sure you check the rules regarding sub-letting first, given there could be serious legal consequences if it’s done incorrectly.
But if you want to start sub-letting, where are the best locations to do so? To find out, the home and contents insurance experts at Compare the Market carried out research in the US and Australia, analyzing renter population, average rent prices, searches around sub-letting and more, to see which states and cities offer the most feasible sub-letting opportunities.
On top of this, we also examined how feasible sub-letting really is, the legality around it, and the sub-letting risks and benefits for tenants and landlords to be aware of to give you a better understanding of this practice if you’re considering sub-letting for yourself.
Starting with America first, let’s turn to the most popular areas across the United States for sub-letting. We’ve highlighted the top three states with sub-letting potential right now, below, as well as flagging which states have sub-letting potential in the future:
Given the popularity and iconic nature of New York, it should really be no surprise that this state has massive potential for sub-letting. Scoring 66.92 out of 100, New York has both the highest percentage of renting population at 45.7% and the highest number of rent-related searches per year at 158.7 per 100,000 searches.
Perhaps more interestingly, however, New Yorkers also tend to spend around 22.4% of their household income on rent, putting them towards the bottom of this category, not to mention having higher rent costs, which average US$1,576 per month. However, these just give you all the more reason to look into sub-letting here to save on these overheads.
Moving next-door to Rhode Island, which placed second with a solid overall score of 66.66 out of 100, this northerly US state had the third-highest number of rental searches per 100,000 with 119.5, while also placing fifth for the percentage of renters at 36.7%, highlighting just how popular renting is in this area.
But unlike New York, renters in Rhode Island spend an average of 17.7% of their household income on rent, putting them 11th for this ranking factor and much higher than New York. Add to this a somewhat reasonable monthly rent cost of US$1,273 and Rhode Island becomes a sub-letting hotspot not for saving money, but potentially as a way to earn more funds.
Rounding out our top three, we have a rather less well-known state in the form of North Dakota. Nestled at the top of America along the Canadian border, North Dakota enjoys the lowest percentage of household income being spent on rent (14.8%) as well as the sixth-highest percentage of renting population (36.6%).
Better yet, North Dakota placed sixth overall for average US monthly rent at US$934. However, thanks to its out-of-the-way location, North Dakota had the lowest number of searches around renting of any US state (a surprising 0 per 100,000 searches). Yet, like Rhode Island, such low costs may make sub-letting here a nifty way to make additional money on the side.
With New York being the most popular US state in the country for sub-letting, how did other well-known states like California, Florida, and Texas perform in comparison? Is sub-letting something these states can accommodate?
Well, despite being the most populous US state, and a preferred destination for many, California only placed 44th in our table, even though it had the 2nd highest renting population (44.2%), the highest renting costs, and the second-highest percentage of income going on rent in America at US$1,956 and 24.4% respectively.
With stats like these, you’d be forgiven for thinking that California was a more popular potential sub-letting spot. However, with rental searches being lower than states like New York, and sub-letting laws varying from state to state, it may be that setting up a sub-let is not worth the hassle right now, but it could be viable in the future as a means to save money.
And it’s similar news for renters in Florida. Coming last on our table, Florida has the highest percentage of household income spent on rent at a massive 26.2%, alongside an average monthly of US$1,564, which you’d think would make it fertile ground for sub-letting, but with a middling rental population and searches, it seems sub-lets are yet to catch on.
As for Texas, on the other hand, this state managed to fall in the middle of the table. Scoring 49.94 (putting it 27th), Texas has average rental searches of 64.7 per 100,000 and middle-of-the-ground monthly rent costs of US$1,339, making it a reasonable option for those seeking sub-letting opportunities in one of America’s most popular spaces.
Having looked at sub-letting around the US, how does Australia compare? Are there certain states that are more sub-let friendly than others, or is the practice unfamiliar to us Aussies?
The heart of Queensland and the largest city in the area, Brisbane proved to be the best city for sub-letting opportunities in Aus, scoring 66.94 – a full 59.44 points more than the Sunshine Coast, which came last thanks to its abysmal score of 7.50.
Brisbane itself has the second highest percentage of renting people out of the 13 Australian cities we analyzed, with 35.6% of the population renting their home, while also being the third most affordable city to live in thanks to an affordability index score of 60.2.
Combine this with Brisbane’s high rent searches, which put it fourth for this factor with 118.6 searches per 100,000, an average rent of AU$380 per month (the fourth best), and it’s clear that Brisbane is ideal for sub-letters looking to save more money to enjoy this vibrant city.
Following closely on Brisbane’s heels, we have Australia’s most famous city – Sydney, which scored a total of 60.99 out of 100 and enjoys the highest renting population of the research at 36.8%.
Not only that, but Sydney also saw the most searches around renting, with 164.6 per 100,000, as well as being the seventh most affordable city, sitting in the middle of the table here with an index score of 57.4.
But, as you might expect, Syndey was also the city with the highest rent costs, being an average of AU$475 per month – though you could argue that such high costs make this city a fantastic place for sub-letting to take off if you want to cut your rent bills!
Finally, the last of our top three is another famous Aussie city. Scoring another respectable total of 60.71, Melbourne is the second most affordable and second most searched-for city around rental terms in the country, landing 61.0 points and having 152.4 searches per 100,000 respectively.
As for our other two factors, Melbourne performed reasonably well, housing the fifth highest percentage of renting population on our list (30.5%) and coming fifth for average monthly rent (AU$390).
On the whole, this puts Melbourne in a similar spot to Brisbane and Syndey, with enough high-scoring factors in play to make it a great location for those interested in trying sub-letting to supplement their income.
Besides our top three cities, there were a few other locations that stood out from our dataset.
The capital, Canberra, for example, actually had the highest affordability score of all Australian cities, with a solid 69.0, which no doubt helped to secure it the fourth position on our table, alongside having the fourth highest renting population (31%), both of which make it a great place for sub-letting.
Similarly, Adelaide, Geelong, and Perth, all had relatively cheap rent, with Adelaide having the lowest at $320 per month, and Geelong and Perth placed joint second with AU$350 each, making these cities ideal for anyone wanting to save more money away instead of reducing rental overheads.
And as for the area with the least sub-letting in Australia, this goes to the Sunshine Coast, which had the lowest searches for renting at 46.6 and the lowest renting population at 26.8%, making sub-letting less than ideal in this area, with people appearing more inclined to simply buy their homes outright rather than rent.
Although sub-letting can be a reasonable source of additional income, there are several important things you’ll need to consider before you can actually begin the sub-letting process.
For example, in the US, you need to understand exactly what the sub-letting laws in your state allow for, as states like New York are incredibly strict when it comes to sub-letting regulations.
Naturally, you also can’t simply start sub-letting part of your rental without your landlord’s permission, which is legally required for a sub-let to be deemed valid. It may also be the case that sub-letting is not allowed under your rental contract or tenant rights, which will prevent you from sub-letting unless you have specific, written permission from your landlord and the contract is amended.
And, much like renting out a property, sub-letting a space in your home, or living in sub-let accommodation, comes with risks, which is why most experts recommend doing the following before taking anyone on as a sub-tenant:
Perhaps most importantly of all, however, if you are planning on sub-letting a room in your rental property, or even if you are not, it is vital that you invest in the right home contents insurance to protect your property against loss or damage.
As Adrian Taylor, Executive General Manager of General Insurance from Compare the Market also notes:
“For the owner of the property, although landlord insurance covers a variety of essential areas, in the vast majority of cases, aspects such as tenant defaults, and loss of rent may not be covered by basic policies.
“This makes including these optional extras within your insurance policy essential if you want to protect yourself against unforeseen risks.
“Likewise, if you’re planning on living in sub-let accommodation, taking the time to find affordable cover for your own belongings is a must, just in case the worst happens.”
Always check the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before purchasing a policy to ensure you understand any limits, restrictions and inclusions.
This dataset contains 2 rankings, one ranking all 50 US states and another ranking 13 of the most populated Australian cities, based on how good they are for sub-letting.
To do this, 4 different factors were used, and once the data for the factors was collected, the factors were then normalised to provide each factor with a score between 0 and 1. If data was not available, a score of 0 was given.
The normalised values were then summed and multiplied by 25 to give each location a total score out of 100. The locations were then ranked from highest to lowest, based on their total scores.
The factors used were as follows:
The factors were then indexed as follows:
All data is correct as of 10/02/25. The ranking data shown is a compilation of multiple data sources and may not be representative of real life. All data is accurate with regard to the sources provided.
All factors, except rental search volumes, were gathered from census.gov and abs.gov.au respectively, and for Australian locations, we selected ‘Significant Urban Area’.