Did you just get a place with a roommate for the first time? How exciting! Living with a roommate means you have a lot of things to consider. This can include room allotment, creating a chore chart, and the most important of all: how to split rent. No matter who you’re moving in with, it’s best to define your rent-splitting terms from the start.
There are multiple methods you can choose to split rent. In this blog, we’ll tell you what they are, as well as some tips to avoid conflict in the future. So let’s get into it!
The Best Ways To Split Rent With Roommates
1. Split Rent Amount Equally
This one’s probably the most common because it’s a no-brainer. This method doesn’t take into account the space occupied by each person or any other contributions they make to the home. Here, the total rent amount is split evenly between all the roommates. If there are three roommates, the rent would be split three ways, and so on. This method usually works best among friends.
2. Split Rent Based on Income
If one roommate is earning considerably more than the others, it’s not fair that everyone pays the same amount (unless they’re okay with that!). Either way, it’s a good idea to disclose your income while discussing how to split rent with roommates.
To split rent based on each roommate’s income, begin by calculating the total household income (everyone’s income combined). Calculate how much you need to pay by dividing the household income by your personal one. Doing so will let you know how much percentage you hold among the rest. That’s the amount you need to contribute to the total rent.
For example, the total household income is $10,000. If you’re earning $3000 a month, you’ll pay 30% of the total rent. So, if the rent is $2000, you’ll have to pay $600.
3. Split Rent According to Your Occupied Space
This sounds a bit awkward but also makes a lot of sense. Here, you’ll split rent according to the amount of personal space you occupy i.e. spaces that are yours and no one else’s. This includes your bedroom, (if private) bathrooms, and any other space you and your roommates agree upon.
This technique does not include common spaces like the kitchen or living room. To split rent this way, you first need to determine the total square footage of all private spaces in your home. Divide that by the total space occupied by you.
Similar to the method above, the percentage you get by dividing the total space is the percentage of the rent you pay.
4. Don’t Split Rent, Split Expenses
This is also a cool way to fairly split your costs as roommates. Instead of just splitting your rent, you also have the option to split all your household expenses, combined. This will include rent, food, utilities, and any other common expense like furniture.
You have two ways to do this. You can give each person the responsibility of one type of expense, like you’ll do the rent and your roommate will pay for utilities. Or, you can divide the total amount using any of the above techniques.
How to Avoid Rent Related Conflict
Despite using elaborate methods to split your rent costs, there can be instances in the future when one roommate feels like the arrangement doesn’t suit them. Or, they may have faced a job change where they’re earning less or more than they did before. To ensure the arrangement suits every roommate in the long run, here are a few tips you can consider to avoid conflict.
1. Create a Roommate Agreement
Having everything in writing is the best course of action where money is involved. When you decide how to split rent with roommates, note down every little detail of the discussion. It doesn’t have to be something extremely formal, but should state everyone’s contribution and roles.
A roommate agreement can have many points other than rent, like the division of chores and such. Just take notes from Sheldon! Once your agreement is finalized, get everyone’s signature on it. This can seriously avoid any sort of conflict or argument related to your apartment in the future.
2. Review The Arrangement Every Month
Hold a roommate meeting to review and/or update your roommate agreement every month. This gives everyone a chance to stay flexible while sticking to the arrangement. If someone faces a job change or one of the roommates moves out, you can incorporate that accordingly.
3. Create a Payment Schedule
This one’s pretty self-explanatory. Decide on a date every month when each roommate will pay their rent – and stick to it! Add all these points to your roommate agreement so that there’s no excuse for tardiness.
4. Decide Your Payment Methods
Everyone can have different payment methods, but it’ll be great if you can stick to just that one every month. If you decide to use PayPal, try to use only PayPal for paying your rent every month. A great way to go about this is for every roommate to pay their share to one designated person, who pays it forward to the landlord.
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