How To Split Rent
Typically, a renter’s most significant monthly expense is their rent, which is why many choose to split their rent with roommates to help offset the expense. This can be smart as it can help reduce monthly expenses by hundreds of dollars.
The tricky part is figuring out how to split costs fairly. Here are a few things to consider before making any final decisions. Keep in mind that everyone’s living situation will be a little different.
Different Methods For Splitting Rent
You can divide rent in a lot of different ways. When determining which option is ideal, consider factors such as room size, salaries, and the relationship between roommates.
1) The Even Split
The simplest solution for many situations is to divide rent equally. For example, if everyone living in the apartment is okay with some bedrooms being bigger and sharing bathrooms, it is possible to share rent this way. The best people to try this approach would be those who are already close friends and would be comfortable occupying the common areas often.
The only caveat is acknowledging that people sometimes change their minds. What may seem like a perfect solution now may need some tweaking further down the line. Check in with your roommates at least every six months to ensure everyone is still happy with the agreement and how it’s playing out.
2) Rent Calculated By Space
For those who share an apartment with people they don’t know well, deciding to split rent by the amount of space they use is a reasonable option.
Calculate all the square footage of space each renter claims as their own to determine that individual’s share. Bathrooms and bedrooms should be included in this, but not public areas like the living room and kitchen. The individual would then pay the same proportion of rent as the space they occupy. Determine this amount by dividing each person’s personal space by the total square footage of the apartment.
3) Divide By Income
Another option is to prorate the rent based on each roommate’s individual total annual income. Everyone pays what they are most able to.
To do this, add up all your incomes and then figure out what percentage each of you brings to the table. Next, multiply the total rent on the apartment by each person’s percentage. The result will be the amount each person should pay.
For example, Roommate A makes $70k, and Roommate B makes $50k. .$70k + $50k = $120k. Their total rent is $2,000. To calculate Roommate A’s share, divide their income by the total income (70k/120k). This comes out to be .583 or around 58%. Therefore, roommate A will pay .583 x 2,000, which equals $1166. Roommate B is responsible for the remaining 42%, which comes to $834.
Roommates can recalculate the amount if either experiences a change in income. This approach relies on everyone’s goodwill and appeals to their sense of fairness.
4) Use a Rent Splitting Calculator
Consider using an online rent-splitting calculator to help determine the best system for you and how each person’s rent would come out. Simply go online and search “rent splitting calculator” to find a number of simple, free online calculators.
Online rent splitting calculators can give you a straightforward way to divide rent based on the total rent, size of rooms, number of bathrooms, closet space, and other factors.
Additional Tips for Splitting Rent
Here are a few more things to take into consideration:
Maintaining Clear Communication
Discussing who should pay for what and how much each can afford can be tricky. Financial discussions, as a rule, tend to be. Nonetheless, it’s essential to have financial expectations outlined as soon as possible.
Determine who the point of contact will be for the landlord—particularly for purposes of paying rent. Confirm that everyone can afford their agreed-upon share. You should also decide among yourselves how other expenses will be covered.
It’s essential to keep open and honest lines of communication open the entire time.
Renting With a Couple
When you mix single roommates with couples, things can get a little tricky. Couples often combine their incomes and expenses, so they are, in a sense, a single entity made up of two people.
When splitting rent, it’s usually best to calculate the rent based on how much space each occupies and how the shared spaces are used. For example, if the single renter takes up less space and uses areas such as the living room or kitchen less than the couple, their rent should reflect this.
As it is recommended that roommates get together every six months to make sure everyone is okay with the rent and living situation, individuals and couples sharing a home may wish to connect with each other more often to ensure everyone is happy and satisfied.
Documenting the Agreement
Once you’ve decided how rent and other expenses will be split, it’s a good idea to write this down. Even if things start well, issues might come up later on. So you should keep a copy of your rent-splitting agreement somewhere that everyone can access, just in case.
Sharing living spaces and rent is a great way to take advantage of your collective resources and, when done right, can benefit everyone. Whether it’s simply being able to afford a place to live or living cheaply while saving for a down payment on something better, splitting rent can be a viable solution to many situations.
The trick is to do it fairly and sensibly, maintain good communication, and keep good records.
Doing so will make for a better living situation for all involved.
Now that you know how to split rent, the next thing is finding a new apartment. Be sure to browse our communities!