They say sharing is caring, but living in a share house can be far from pleasant if the rules about splitting expenses aren’t well established.
Savings expert Kylie Travers explains how to decide who pays what, in order to avoid financial fistycuffs.
For starters, Travers recommends setting ground rules before you move in, so everyone knows what is expected from them. And she also suggests getting these rules in writing, so there’s no ‘he said, she said’.
“Having it written out – who pays for what and what percentage or amount – means when the bills come, it isn’t an awkward conversation,” she adds.
The first order of business is deciding how much rent each person should pay.
Travers says how you fairly split the rent between housemates will depend on the house, the facilities and who is running it.
“If you’re setting up a house with mates, you can choose to split the house in different ways to make it even. But most share homes are established or run by one person,” she says.
“And the easier way to do it then is by making each room a specific amount, depending on the prices in the area.”
A bedroom with an ensuite and walk-in robe should cost more than a bedroom with a shared bathroom, for example.
“Everywhere I have rented out rooms, the [rent for the] larger room was more, even if only by $10,” says Travers, before adding that a master bedroom with a larger robe and an ensuite often equates to $50 or more a week in value.
Other perks, like a garage spot, should be reflected in the room’s rent too, especially if there is only one spot.
“You need to work out who has what and what each bit is worth. In some scenarios, though, it could be an even split: one person gets the regular bedroom and the garage, while another gets the master with the ensuite,” she says.
When it comes to deciding how to split rent between housemates, some easy methods include:
Having each housemate jot down the price of each room can help you start the conversation. If the prices match up, then it’s a very simple process; if not, then at least you have some idea of what to expect from the ensuing negotiations.
An ensuite and walk-in wardrobe add luxury and value to a room. Housemates should take into accounts these added features when discussing how much a room should cost. Balconies and parking spaces should also be considered.
It’s hard to argue against data. So, for those who are good at maths, figuring out the cost per square metre could be an appealing option. This method will help in share houses with a granny flat or a less traditional floor plan. However, basing the rent of a bedroom on size doesn’t take into account extra amenities, or access to other key areas of the house.
Even though a couple shares a bedroom, they are both using the common areas of the house, such as the kitchen and living room, which is important to remember when splitting rent. Overall, having a couple in a share house can be appealing, because it often makes rent cheaper. Experts recommend charging couples between 15 per cent and 40 per cent more for a room.
When it comes to splitting bills, an even split is often the best approach, as it can be tricky to track individual usage.
You should interview potential housemates about their usage and habits before moving in together.
This way you can ensure that you’re living with like-minded people and that you’re on the same page when it comes to electricity usage and payments.
If you end up in a situation where one person is using electricity non-stop, you need to come to an agreement.
“For example, I lived with someone who wanted the air-conditioning on overnight. They paid the extra for that convenience,” Travers says.
While most people have mobiles for phone calls, removing the need for a landline, fixed internet charges can be split.
“You can get cheap unlimited plans and split the cost. [Either that], or each person can have their own portable internet,” Travers says.
Food costs can also be shared. The best arrangement will depend on your housemates’ preferences.
In some share homes, it works well when everyone chips in for food and shopping.
“Or you can have a kitty for communal expenses, such as milk and bread, but everyone buys everything else themselves,” says Travers.
“If you are living with someone who is super strict about the way they eat, [who is] on a special diet or fanatical about money, it’s easier for everyone to do it themselves and not bother splitting the groceries.”
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