Tips on Sharing Rental Costs With a Roommate
One of the biggest advantages of having a roommate is the ability to split the cost of rent and utilities, which usually means you'll be able to afford a larger apartment with better amenities than you could if you were living by yourself. However, when you live with a roommate, you have to share major expenses, and money can be a sensitive subject.
Everyone has a different view on money -- some are spenders; some are savers; and some are a little bit of both. If your roommate isn't reliable when it comes to making payments, it could end up costing you. That's why it's important to make sure you and your new roommate are financially compatible before you sign a lease together.
Define how you will split the rent and other expenses. Whether the bedrooms are different sizes or one person has more amenities than other, sometimes splitting the rent in half just doesn't work. If that's the case, here are some ways you can determine what each roommate pays:
- Splitting the cost by size: If there is a big disparity in the size of the bedrooms, you may want to base what each roommate pays by square footage. Start by figuring out the cost per square foot of the apartment. You'll do this by dividing the total cost of rent by the total square footage of the apartment. For example, if your rental rate is $1,000 per month for a 1,000-square-foot apartment, the cost per square foot is $1. Next, determine the square footage of each bedroom, and multiply that number by the cost per square footage. If one bedroom is 250 square feet and the other is 350 square feet, the rental rate per bedroom would be $250 and $350, respectively.
- Factoring in amenities: In addition to square footage, you should also consider any amenities and perks. For example, if one roommate gets a master bedroom with a walk-in closet and his or her own attached bathroom, he or she should pay more than the roommate with the smaller closet and shared bathroom.
- Don't forget other shared expenses: While you're discussing how to split the rent, you should also talk about utilities. Does one person feel cable is unnecessary while the other can't live without live sports? Talk through who will use what, and decide what you both think is fair.
Determine your payment method. Your landlord will probably accept two checks for rent, one from each of you, so paying the rent via check shouldn't be a problem. You can also talk to your landlord about getting set up with Lovely, an app and service that allows you to pay your rent online. It even lets you set up reoccurring payments, so you never have to worry about a late rent payment.
Other bills -- such as electric, gas, cable and Internet -- may pose a bit more of a challenge. You may choose to split the number of bills or divide the payment by the average amount of the bill. Regardless, you'll need to come up with a method for keeping track of who owes what to whom. Don't rely on memory – you and your roommate can easily forget or remember differently. You can always go the traditional route of using a spreadsheet, but technology has made it easier than ever. Simply download a bill-splitting app such as Splitwise, SpotMe or Venmo, which do all the work for you.
In addition to how you split the cost, discuss how long roommates have to pay each other back for shared expenses to make sure you're on the same page.
Write and sign a roommate agreement. Once you've worked out all the details of your shared expenses, set it in stone with a roommate agreement. It may seem like overkill to sign a contract with your roommate, especially if he or she is a friend, but having all of your decisions in writing can save you from arguments down the line. In addition to finances, you can add other rules you've agreed upon, such as overnight guests and a cleaning schedule.