Renting With Roommates and How to Split the Rent
Figures from the Australian Bureau of Statistics (ABS) show that our largest renting demographic is those aged under 35 with no dependent children. The years of freedom! Regardless of whether you find yourself within this group, here are the ups and downs of living with room-mates and tips on how to split the rent and bills.
Benefits of renting with roommates
Before you start living in a property, provided the landlord is satisfied with your application, you and your room-mates will sign a co-tenancy agreement.
This will effectively ensure that each flat mate has equal legal rights and responsibilities, with no co-tenant allowed to influence authority over others. This works especially well if you're living with a mix of people that you know and can trust.
Having a roommate or two can help you manage the financial burdens of renting because you don't need to shoulder the total cost of your living expenses. Splitting rent with roommates also can help you choose a better location that you may not be able to afford on your own plus it will help reduce the amount you pay in utilities and shared household supplies.
Part of the fun of living in a house with roommates is the amount of time you get to spend with friends and relatives that float in and out of your housemates' lives. You will almost always have someone around to share a drink, to carpool, to order takeaway with and not to mention a saviour who can let you in when you're locked out!
Negatives of renting with roommates
The benefits that come with a co-tenancy agreement can also become negatives, given the right (or wrong) circumstances. The most important factor that you must take note of is that co-tenants share joint liability. This means that as soon as your pen hits the paper, you're bound to the agreement both as an individual and a group.
For example, if your roommate had been missing rent payments for a few weeks and their debt had compounded, all the other co-tenants, including you, could be held responsible.
To help ensure your renting experience with roommates goes without a hitch, here are a few tips to take on board with payments:
Paying the landlord
In order to avoid the situation where you could find yourself having to fund your roommate's rent, you should be vigilant when it comes to the weekly payments. If you request it, your landlord or property manager will provide you with a receipt of your payment.
Keeping on top of this will allow you to ensure that the necessary payment is being met, and if not, enables you to act quickly.
Splitting the rent
Figuring out how to split the rent can be challenging but when living with roommates it is an important process to go through before your sign the lease. Here are 2 solutions to make this process as fair as possible and to help reduce any arguments.
Divide the square meterage
This is an easy and fair way to split to rent. To get an accurate breakdown, take the square meterage of each bedroom and divide by the total square meterage of the property. This gives you the percentage of space that each room occupies. Then take each individual percentage and apply it to the total cost of rent. This therefore breaks down the cost according to percentage of total space occupied.
Who has the most perks
Consider what each person gets for the rent - is it fair? For instance, if someone has an ensuite, built in cupboards, balconies, windows, then they should pay extra. You can assign a cost to each amenity and add that to an evenly divided room price.
Paying the bills
One of the main points of conflict when sharing a house with roommates is rationing the utility bills, because really, no one wants a slice. It is recommended to assign the responsibility to one of the co-tenants as soon as you move in. This doesn't mean they pay the entire bill, but rather are responsible for paying the bill on time
Generally, you should divide the expenses such as gas, electricity, internet and water equally among yourselves, before paying your allocated member the required amount when necessary.
It can get difficult when usage is uneven, for instance one roommate has an electric blanket they never turn off or another who steadfastly streams re-runs of Star Wars each and every day. If that is the case, it is worth coming to an agreement to ensure they pay extra for their habits.
Good luck with your roommate experience - if you plan it right and sort out the rent and bills up front you'll no doubt have loads of fun.