My fiance and I are in the process of buying our first home together, and have offered to let a friend and her son move in with us and “pay rent” (part of the mortgage + utilities). Now, we’re not concerned (yet) about sharing spaces, etc, but my fiance does have a bit of a hang up on the payment situation.
Due to city housing ordinances, my friend’s son is required to have his own bedroom, so she will essentially be taking two bedrooms while my fiance and I have one. He thinks our friend should be paying more than just half because she’s taking more space — but the whole point of this exercise was to help her pay less so she can pay off credit cards and medical bills. My suggestion was that all of the adults (myself, fiance, and friend) all pay in equal “budget” (such as $500) to cover bills and mortgage and anything left over goes towards house renovations or something else.
Homies, how have you worked out splitting the costs between roommates in such a situation before?
Is the rest of the space in the house going to be truly split? Does your friend get to put half the furniture in common rooms and use the kitchen space for her dishes and such?
As someone who has lived in a house owned by a roommate, I had one of two bedrooms to myself but I wouldn’t say that I felt like half the place was mine. She furnished everything and most of my stuff was in storage because it was her place.
Are you buying a bigger house because she’s going to be living with you?
Here’s our thought: Our mortgage is the same whether we have someone renting our extra rooms or not. We aren’t paying any extra because they’re living with us. However, our utilities do go up as do the amount of effort to keep things clean. Therefore we charge enough to cover their share of utilities plus a little extra (which we try to budget into home improvements which will benefit our house value long term as well as all residents at the moment). But then our tenant lives in our basement room and thus isn’t taking up space that we were using for something else (other than storage and video games). Perhaps pointing out to your husband that you guys would have the same mortgage payment whether she was living with you or not might make him more okay with the idea of her paying less than her “fair” share.
How much the mortgage is has nothing to do with this whole equation. You own a house; you would own it whether or not you had renters, and you should be able to afford the full mortgage without renters. So just charge them the going rate for renting two rooms in a house in your area. Say that utilities are included. Give them a slight discount if part of your intent is to give a friend a break. It would be different if you were all renting a house together and splitting it three ways – but you’re not. You pay your mortgage to the bank. She pays her rent to you, her landlord. That’s it. Nothing is being “split” here.
ya, the thing i think is weird about this is that “pay rent” is in quotation marks. You do no favours if you don’t make this agreement explicit- you own the house, your friend is paying rent and living there. She should have a lease or some kind of paperwork and you should work it all out. I live in a collective house with 5-7 people and having explicit arrangements is really the only way to do it, it helps both when you all get along and if something goes wrong. She should pay fair market rent for the rooms she is renting or you guys can calucate it for those two bedrooms based on market rent and then give her a discount depending on her income- but remember that as the owners of the house you guys are going to feel like you have more rights, really she is just renting the bedrooms not half the house. I suspect that you two are going to take the larger bedroom anyway, so depending on size/light the smaller bedrooms should be a bit cheaper anyway. What are you going to do if there are renovations or repairs to be done- this should be spelled out (and really it should be you that does them as does any landlord). Are you going to share food/cook together? There should be pre-negotiated arrangements and regular official house meetings. But you also shouldn’t kid yourself as to what this arrangement is. She is paying rent for real not “paying rent” quotation marks and is a tenant in shared space.
Exactly! Write up a rental agreement. There are a bunch of them online; you can google them and customize them to your situation. If there are any disputes, it’s always better to have something in writing beforehand!
If the housing ordinance allows it, and the room is big enough, maybe the child’s room could be “split” with a curtain or something and you could use the other half of the room for storage, an office, etc. etc.? Maybe your partner would find the situation to be more equitable then?
How old is this son? Are we talking 5 years old or 15 years old? This could make a big difference in our answers.
I totally agree with the comments asking why your friend needs to know the monthly mortgage bill at all. I know you are friends, but at the end of the day, you’re also her landlord. This means that you’re in charge of not just the mortgage, but also the upkeep, property taxes, insurance, etc. When light bulbs burn out, the toilet backs up or the refrigerator breaks, it’s all on you to fix it.
I’d say pick a flat monthly fee which includes utilities that is reasonable and she can afford. Then call it a day. Write it down and get everyone to sign it.
Forecasting slightly, I predict the biggest issue will be how to deal with groceries. Does everyone buy their own or do you share some things? I lived in a roommate situation where we had four bottles each of ketchup, mustard & mayo because, god forbid, someone would use more than their fair share of communal condiments.
This is how I’ve done it with roommates in the past. The amount of the rent/mortgage payment has several components:
1. rent for common spaces
2. rent for private spaces
3. utilities
4. (when you own) equity/the benefit you get from owning it long term
You have to decide what proportion of your monthly payment each of these is. For example, if your mortgage + tax + insurance + utilities every month was about $2000, you might decide on this breakdown:
common spaces – $1000
private spaces – $700
utilities – $100
equity – $200
Make sure everyone thinks that valuation is fair. Then you decide who pays what proportion of what part. So you could do
3 adults sharing common spaces – $333.33 per adult
two bigger $250 bedrooms and one $200 bedroom
utilities split 4 ways – $25 per human
equity payed entirely by owners
Then her payment would be $333.33 + $200(small bedroom) + $250(bigger bedroom) + $25*2 = $833.33
And yours would be $333.33*2 + $250 + $25*2 + $200 = $1166.66
The exact numbers aren’t important. The important part is to break down the total amount into meaningful components, and then work together to find a fair division of the payment for each component. This makes the conversation a lot more concrete, and also forces you to hash out issues like how you’re going to share common spaces before moving in. If you can’t find a balance that everyone feels is fair, don’t move in together.
Also, this method makes it easier to change payment amounts when circumstances change without seeming like you’re arbitrarily raising the rent. It’s easier to say “Hey, your kid is bigger now and using more common space. Can you pay more of that part of the rent?” than it is to just demand more money.
Again- I agree with the other posters that the mortgage amount should have nothing to do with it. Mortgage payments cannot be boiled down into rental payments, especially in such a volatile market. Do a search on rental rates in the area and cut the friend a deal everyone can agree to so she can get on her feet.
Can I just say that the discussions going on here are awesome & eye-opening. I love that I can come to Offbeat **anything** & have my opinion challenged, changed, & still accepted.
How much money do you and your husband have to have her contribute to make her living there viable? How much do you want to help her out?
Fairness isn’t about everyone getting the same thing, it’s about each person getting what they need.
Are you by any chance a teacher? Because a teacher friend of mine was just telling me about explaining fairness to her students & used that exact same wording.
Home-school-headmistress I like to call it.
It sounds like, regardless of what you think is fair for your friend to pay, there is a maximum amount she is able to pay, which may not meet the amount of rental income you need. If that is the case, then everyone is going to be stressed over money all the time, so perhaps you shouldn’t go ahead with it, because neither goal will be met (you making enough money to pay the mortgage, your friend saving money).
I live in a similar situation right now, that is currently functioning well. I was living with two roommates in an apartment, and when I bought a house, they moved in as roommates/tenants. It was fairly easy for us to figure out the rent amounts because we had already been splitting the rent for the apartment. One roommate pays more rent than the other, because she has the master (because she has the most stuff and wants her own bathroom). She doesn’t pay twice as much for the master as one of the other bedrooms, though, just a somewhat larger amount.
We’ve successfully lived in this arrangement for a little over two years. Now I’ve gotten married, and it’s me and my husband in one of the smaller bedrooms, and the roommmate in the other small bedroom is planning to go away to grad school, so we’ll have to reassess the financial situation soon.
I had a situation once where I lived in a 3-bedroom with 3 other people – one couple sharing a room and one other person with her own room. We charged them more than 1/3, because they were both using the rest of the apartment more than 1/3 (as they made up 1/2 of the people there). So we took the total rent (call it $1000 because that makes numbers easy), divided by number of total rooms (3 bedrooms plus living plus kitchen plus bath = 6 rooms), so each room costs about $167 per month. The people with single rooms play $167 for the bedroom plus 1/4 of the $167 for each additional room for a total of $292 per month. The people sharing the bedroom each pay 1/2 of $167 for the bedroom plus 1/4 of $167 for each of the 3 other rooms, for a total of $208 each, or $417 for the two of them. They didn’t pay half, but they paid more than 1/3. Each person with their own bedroom paid more than 1/4 of rent for more space.
My husband and I are room mates with a single friend. We added the total of the bills: rent, utilities, internet… and divided it by 3. She pays 1/3 and we pay 2/3. We also end up covering other expenses like trash bags, and cleaning supplies for the ‘public areas’ which may or not be “fair” but it is what it is. 🙂
I think the fact that this is already a point of contention between you and your fiance needs to be examined. It sounds to me like you are thinking of this as a way to help your friend, and he is thinking of it as a way to fund your mortgage. Make sure he is 100% on board before you all move in together, because roommate situations can get really unpleasant really quickly.
My fiance and I let a friend live with us for over a year. He had lost his job and was having a rough time, so my fiance felt like we were obligated to help him out. I was worried about the whole thing, but I was friends with the guy and didn’t want to be an unhelpful jerk, so I agreed despite my misgivings.
I’m very much a private, need-time-by-myself-to-recharge type of person and, basically, by the time he finally moved out the living situation was so frustrating that I was trying to find excuses to get out of the house most nights. Now, there were other factors at play that don’t exist in your situation… but still. Make sure your fiance is really on the same page before your friend moves in. If he’s not, this could wind up being a huge strain on your relationship.
So, if you want to be monetarily fair you should use this rent calculator. It allows you to put in different sized rooms and takes into consideration some of the common amenities. I’ve found it works with roommate situations amazingly.
http://www.splitwise.com/calculators/rent
Though in this case, I’d really go at it situationally. It sounds like your friend isn’t in the best place in life when it comes to money. Being a single mother myself, I’ve been in a very similar situation and had to rely on friends to help me from time to time (it really does take a village).
I’d speak with your fiance and see what his personal bare minimum is when it comes to her contribution to the house bills, and go from there. Even if she can’t give as much as he’d like too, you’ve spoken with him and made him feel involved. Just keep communication open and make sure no one feels like they are being left out of taken advantage of. If your friend can’t pay what your fiance suggests, maybe she can do chores around the house to make up for the lack of cash.
I know I would be ok with knocking a couple hundred bucks off a months worth of bills (saying I could actually afford it at the time) for not having to do a single dish or clean a bathroom!
Another perspective; Your friend is paying part of the mortgage while living with you but you and your husband own the house. When, or if, you sell ht house it’s you and your hubby that get to keep the profit from that sell.
I’m not sure if this helps at all, since it’s not the same situation, but here goes.
When I lived with a roommate, the apartment had a large master bedroom and a very small kids’ bedroom. The kids’ room was half the size of the master (we measured). Roommate and I decided to split the rent unevenly; I paid just over one half and took the master bedroom and she paid just under one half and took the kids’ room. We did this because I earned more than she did and I didn’t mind paying a bit more.
We could have split it based on room size, with me paying two thirds and she paying one third, but we didn’t think that made sense. We shared a kitchen, livingroom and dining room and we spent most of our waking hours in the common areas. Our bedrooms were really just sleep/storage areas.
So we agreed that having a larger bedroom was worth a slight premium over splitting the rent evenly. One person gets to keep their desk in their room, the other person has to put their desk in the living room. No big deal for us. All other expenses were split evenly.
So to appease your husband, perhaps you could consider splitting the rent slightly unevenly but not base it on square footage of, or number of, bedrooms used.
However, take into account that you are helping a friend. Can you, personally, afford to split the rent evenly while your friend recovers from her setback? If you’re worried about her over-staying and never recovering, put a date limit on it. Ask her if she thinks she can get back on her feet in 6 months, a year, 2 years… having a deadline can be motivational. Write down what you both can agree on. Talk about what should happens if she needs more time. Write that down too. Keep a copy each.
While I’ve never encountered a situation with a child, when we were sharing a rental with friends, we would split up the rent by number of bedrooms and the utilities by number of people. For example, if the rent for a 4 bedroom place were $2000, each bedroom would be “worth” $500. If you want to cram 5 people in your one bedroom, that’s your perogative, it’s still $500 for the room. The utilities we divided up by the number of people. If there are 10 people living in your house, you each pay $10 of the $100 water bill. This always made the most sense to me. I suppose it could lend itself to a “But you have 45 minute showers and I only have 10 minute showers” conversation, but if people are just being reasonable, it shouldn’t be an issue.
I am currently in a very similar situation with my family. My mother is going through some health issues and asked my wife and I to move in with her to help her out with daily task so we moved out of our home and moved in with her to help out. Since we are living there we split up bills with everyone in the house but since my little “baby” brother, who has 2 kids ages 5 and 6, moved in my step father said that they only count as 1 and now his new Girlfriend is moving in who also has a small child and they are saying because she is 2 she doesnt count so when it comes to splitting bills he is only paying for 3 people. My argument or question is that his children eat as 3 people, they use electricity and electronics as 3 people, water for baths etc. For 3 people, have their room that they share. Is it right for me to request that they are counted individually when it comes to paying utilities. Now when it comes to rooms My brother and his family are only using two rooms and when it comes to the rent that shoyld be split up accordingly but as far as utilities should he or should he not be paying for 5 people?