Splitting the rent payments with another person is a great way to save money on what’s usually your largest living expense. It’s much cheaper than living alone and can save you hundreds of dollars on your monthly obligations
To keep the peace at your place, it’s a good idea to review your choices for splitting the rent with roommate fairly. Afterall, there are several different ways to do it.
The best strategy for you depends on your own situation. You and your roommates may have unique circumstances that you’d want to consider when you divide rental responsibilities.
The goal with splitting the rent is to create an agreement that makes everyone as happy as possible.
In this article, we’ll review:
- How Do You Split Apartment Rent?
- How Do You Divide Rent by Square Footage?
- Dividing Rent by Square Footage: An Example
- Other Ways of Splitting the Rent
- Splitting the Rent by Income: An Example
- How Much Can I Afford to Rent?
- Finalizing a Rental Agreement
How Do You Split Apartment Rent?
In many cases, sharing the total rent cost evenly between roommates is the easiest way to split the rent. Especially when your bedrooms are about the same size.
To split apartment rent evenly, divide the total monthly rent by the number of roommates.
You can even factor in shared utilities like internet or cable. In this case, you add all the monthly bills you want to pay. You can then divide the total costs by the number of roommates.
How Do You Divide Rent by Square Footage?
Another way to go about splitting the rent is to base the amount of rent you pay on the size of your living space.
An easy way to do that is to subtract a little from the person with the smaller room’s rent and add it to the person with the larger room. So, for example instead of paying $700 each, the person with the smaller room may pay $650 and the persona with the larger room may pay $750.
Of course, this isn’t very technical.
If you want to be precise, you can divide rent by square footage. With this method, you would pay rent in proportion to your living space.
To calculate what you would owe, take the total square footage of personal living space. Do not include shared living space but do include personal bathrooms or another other personal room.
Then, divide the total amount of monthly rent by the total square footage of personal space. That will give you a cost per square foot. To get each person’s rent, simply multiply their personal square footage by the cost per square foot.
Read also:
Dividing Rent by Square Footage: An Example
For example, let’s say two roommates are sharing an apartment that costs $1,200. One roommate has a room that’s 450 square feet and the other has a room and personal bathroom that’s a total of 550 square feet.
In this case, the total square footage of personal space (remember we are excluding shared spaces) would be 1,000 square feet. Dividing the rent of $1,200 by the total personal space would give you $1.20 per square foot.
If you had the smaller 400-square-foot room, your rent would be $540 per month. Your roommate with the larger room and private bathroom would pay $660. You can see that together your individual rents total $1,200, which is what you both owe the landlord each month.
Other Ways of Splitting the Rent
In some situations, roommates will want to think about other factors that determine how they’ll be splitting the rent.
For example, perhaps one roommate agrees to cook and clean in exchange for lower rent.
Some people, like closer friends or relatives, split the rent based on income. So, the person with the higher income pays the higher share of rent. One way to calculate this is to get the total household income.
Then divide your income by the total household income and multiply by 100. That will give you your percentage of the rent.
Splitting the Rent by Income: An Example
Dividing the rent by income is not difficult, but it does take a little math. You’ll need to total your incomes then divide the total by each person’s income to get their percentage. Then you’ll calculate each person’s share of the rent by using the total rent due and multiplying it by the individual percentages.
For example, say you are renting an apartment for $1,800 per month. And say you make $75,000 and your roommate makes $45,000. The total household income would be $120,000.
To get your percentage, divide $75,000 by $120,000 to get 0.625. Multiplied by 100 gives you 62.5%. Your share of the rent is 62% of the total rent.
Your total rent would be 62.5% of $1,800, or $1,125. (Multiply $1,800 by 0.625).
Your roommates shares would be the total rent minus your share of the rent, or $1,800 minus $1,125. That rent would be $675.
You can see the rents are very different – just like the incomes.
Read also:
How Much Can I Afford to Rent?
Before you even explore your renting options with a roommate, it’s a good idea to understand exactly how much you can afford to rent.
How much you can afford to rent depends on a number of factors. That includes your:
- Income
- Debt
- Credit History
- Living Expenses
- Overall Budget
The most important factor is your income, or how much you earn each month. Corporate apartment companies and many private landlords will factor in your income when determining whether to approve you as a renter. You will often be required to provide how much you earn as part of your rental application.
Obviously, you cannot afford a monthly payment that is more than what you earn each month. As a rule of thumb, you should plan to spend no more than one-third of your gross monthly income on renting expenses.
If you have trouble with making the calculations, try an online rent affordability calculator such as:
Finalizing a Rental Agreement
Once you agree to the way you’ll be splitting the rent, you and your roommates should put the terms in writing.
That way, you can quickly resolve any disputes. And having a written contract can also be very helpful if there are any legal issues in the future. Hopefully, you will live in harmony and everyone will pay their agreed upon amount. But it’s best to protect yourself with a signed rental agreement just in case things don’t go smoothly.
The Bottom Line
With a signed rental agreement, you’ll be able to anticipate your monthly expenses. This will help you develop a budget better.
But even with terms in place, it may be a good idea to revisit your rental contract with your roommates once in a while. That way, you can check in with whether everyone is happy with the way you’re splitting the rent. And you can make adjustments that you agree to.
Splitting the rent is not difficult. But considering all the different ways you can calculate rental responsibilities and putting the terms in place in writing will go a long way toward creating a tension-free living situation.
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