Finance

How to divide the rent fairly

Three roommates are sitting around the dining room table in their apartment.

Image source: Getty Images

A “fair” agreement is not always strictly equal.


Key points

  • It doesn’t matter which method you use to split the rent as long as all parties involved agree it’s fair.
  • The percentage each tenant pays could be split evenly, by square footage, by income, or even otherwise entirely based on who does what around the house.
  • Whatever you agree to, put it in writing to avoid misunderstandings later.

Housing costs are increasing. In theory, having a household share the cost is the best way to combat rising prices. But, as with most things, there’s theory – and then there’s reality.

What seems like a simple solution to managing your personal finances can be much more complex when it comes to putting it into practice. Even something as fundamental as the equitable distribution of rent can cause many complications.

Perhaps the most important thing to remember is that everyone has their own idea of ​​what is “fair”. The goal is to find an arrangement that everyone can (literally) live with. There are several ways you can interpret a fair financial split depending on your roles and relationship.

Option 1: evenly split

By the most basic definition of a fair share, you would each pay the same percentage of the rent (and associated utility bills). So if the rent is $1,500 a month, two people would pay $750 each or three people would pay $500 each.

This method has the advantage of simplicity, but works best when all rooms are roughly the same size and have the same amenities. You cannot ignore the difference between equality and equity.

What it means? Let’s say the house you’re renting with two friends has three bedrooms: one master bedroom with its own bathroom and two regular-sized rooms. In an equal split, everyone pays the same amount – but does it really? fair people paying the same amount for less space? Probably not.

One way to split the rent in a house or apartment with rooms of unequal size is to split the rent the same way you split the square footage of your living space. In this way, everyone pays for their space in a more literal sense.

Since everyone will be using public spaces, you can ignore them. This makes the math simpler: add up the total square footage of the bedrooms (and any other private spaces). Then divide each household’s private square footage by the total.

For example, imagine that two people will rent a two-bedroom apartment with a shared bathroom. One room is 350 square feet and the other 250 square feet, for a total of 600 square feet of private space. Based on the size of the rooms, they would split the rent 58% and 42%, respectively.

Option 3: Income matching

In some cases, the fairest way to split the rent is based on your means rather than fixed amounts. Basically, you each pay the same percentage of your income for rent. (This option is more common for romantic couples and committed partners than your typical housemate situation, but it can apply to anyone.)

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As an example, let’s say the rent is $1,500 a month. Person A earns $40,000 per year and Person B earns $80,000 per year. Person B earns twice as much as Person A, so she would pay two-thirds of the rent — $1,000 — while Person A pays one-third, or $500. Person B can pay the higher dollar amount, but both people pay 15% of their income.

Option 4: Balanced by responsibility

When you’re thinking about how to split the rent, you also need to think about how you’re going to split responsibilities—and these two areas can overlap for some people. It all comes down to how each of you values ​​your time (and how much you value not having to do certain tasks).

Do you or your household like to cook? Is it worth a little extra money every month not do you have to cook? If one household member is taking on additional responsibilities, it might make sense for the other person (or people) to pay a little more in rent to compensate for their time and effort.

These situations can get sticky quickly, so make sure everyone is clear about expectations from the start. It might even be helpful to have a written document outlining the obligations and costs — as well as showing everyone’s agreement to abide by them.

Option 5: Mix and match

Everyone’s life situation will be unique to the people in it. What works for one group of householders may not work for the next. The nature of your relationship, your finances, your house – all of these and more can affect how you decide to split rent and other expenses.

Be open and honest with your potential housemates about what you think is fair and equitable. If you can’t agree on this, chances are you won’t fit in as housemates anyway.

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