A “fair” agreement isn’t always exactly equal.
the main points
- It doesn’t matter which method you use to split the rent as long as all parties involved agree that it is fair.
- The percentage paid by each tenant can be divided equally, per square foot, by income, or even in some other way based on who does what in the house.
- Whatever you agree to, put it in writing to help avoid misunderstandings later.
Housing costs continue to rise. In theory, having a partner at home to share the expenses is the best way to combat price hikes. But, as with most things, there’s theory — and then there’s fact.
What appears to be a simple file management solution personal finance It can be more complicated when it comes to applying it. Even something as basic as how to divide the rent fairly can cause a lot of complications.
Perhaps the most important thing to keep in mind is that everyone has their own idea of what is “fair.” The goal is to create an arrangement that (literally) everyone can live with. There are several ways you can interpret a financial fair split depending on your roles and relationships.
Option 1: Equal Partition
By the basic definition of equitable division, both of you will pay the same percentage of rent (and associated Water and electricity bills). So, if the rent is $1,500 per month, two people will pay $750 each or three people will pay $500 each.
This method is simple, but it works best when all rooms are roughly the same size and have the same amenities. You cannot overlook the difference between equality and fairness.
what does that mean? Let’s say the house you are renting with two friends has three bedrooms: master bedroom with en-suite bathroom, and two standard size rooms. In an even split, everyone pays the same amount – but that’s really it justice For people paying the same amount for less space? Mostly not.
One way to divide the rent in a house or apartment with rooms of unequal size is to divide the rent in the same way as the square footage of living space. This way everyone is literally paying for their own space more.
Since everyone will be using the public space, you can ignore it. This makes the math simpler: add up the total area of the bedrooms (and any other private spaces). Then divide the square footage of each roommate by the total amount.
For example, imagine that two people are going to rent a two-bedroom apartment with a shared bathroom. One room is 350 sq ft and the other 250 sq ft totaling 600 sq ft of private space. Based on room sizes, they will split the rent at 58% and 42%, respectively.
Option 3: Income adjustments
In some cases, the most equitable way to split the rent depends on your means, not fixed amounts. Basically, you both pay the same percentage of your income for rent. (This option is more common for romantic couples and committed partners than the usual roommate situation, but it can apply to anyone.)
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For example, suppose the rent is $1,500 per month. Person A makes $40,000 a year and Person B makes $80,000 a year. Person B earns twice as much as Person A, so he will pay two-thirds of the rent — $1,000 — while Person A will pay one-third, or $500. Person B may pay a larger dollar amount, but they both pay 15% of their income.
Option 4: Balanced responsibility
When considering how you’ll divide the rent, you also need to consider how you’ll divide responsibilities—and the two areas may overlap for some people. It’s about how each of you values your time (and how much you value not having to do certain tasks).
Do you or your housemate love to cook? Is it worth a little extra money each month to Not Should you cook? If one of your housemates has additional responsibilities, it may make sense for the other person (or people) to pay you a little more rent to compensate for their time and effort.
These situations can get messy quickly, so make sure everyone is aware of the expectations from the start. It can also be helpful to have a written document outlining duties and expenses—and making it clear that everyone agrees to stick to them.
Option 5: Mix and match
Each person’s living situation will be unique to the people in it. What works for one group of roommates may not work for the next. The nature of your relationship, your finances, the house — all of these things and more can all influence how you decide to split your rent and other expenses.
Be open and honest with potential roommates about what you feel is fair and equitable. If you can’t come to an agreement on this, chances are you wouldn’t be a good fit as roommates anyway.
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