Author Topic: Charging a SO rent?  (Read 12374 times)

purplish

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Charging a SO rent?
« on: March 14, 2015, 07:22:23 AM »
I own a couple properties. My SO moved in with me.  At the begining we agreed to pay me what a standard person would pay for renting a room. I've been thinking if this is appropriate? Should we be splitting bills instead? And if so, which? Would that mean we split heat, electricity and internet, but then I pay mortgage and insurance myself? But then again he has his own "man cave" room, which is soley for him.  What would you do?

caliq

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Re: Charging a SO rent?
« Reply #1 on: March 14, 2015, 07:26:41 AM »
If it's just the two of you living in a shared space, and you share all the space, then all the bills should be split 50/50, imo.

GizmoTX

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Re: Charging a SO rent?
« Reply #2 on: March 14, 2015, 07:34:36 AM »
Usually roommates share all the costs, ie. rental or mortgage, insurance, & utilities. If one person has a larger share of the space for his or her exclusive use, then the total costs are usually prorated by square footage.

purplish

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Re: Charging a SO rent?
« Reply #3 on: March 14, 2015, 07:45:06 AM »
We actually have another roommate as well, who pays me rent. So are you say add all bills up, and divide equally?

Murse

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Re: Charging a SO rent?
« Reply #4 on: March 14, 2015, 07:46:21 AM »
Boyfriend/girlfriend or husband/wife? Boyfriend girlfriend should have to pay what they would pay somewhere else. In other words, the boyfriend or girlfriend should not get handouts because they are living with you. You are charging them for the ROOM which is fair. The reason I feel this way is because the boyfriend or girlfriend is not taking a financial risk, you own it so if the roof goes out you have to pay for it. Now, if you are married, charging for a room is absurd (imo) and all expenses should be split.

The difference is that they have no risk, you do.

GizmoTX

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Re: Charging a SO rent?
« Reply #5 on: March 14, 2015, 08:16:19 AM »
Add all expenses for running the house: mortgage, electric, gas, water, sewer, trash, internet, yard maintenance. Include anything shared by all, including insurance & landline phone. If the house is paid off, use a market rate rental amount for the entire house. Repairs for normal wear & age are the owner's responsibility.

Determine pro rata share by the percent of the total private space that each person is using. This assumes that all have full use of the common spaces of living, kitchen, dining, utility rooms. For example, if A & B share a room, B has another room, & C has a room, then if the 3 rooms are approximately equal, then C pays 33.3%, A pays 16.65%, & B pays 49.95%. If the rooms are not equal, then determine the percentages by the square footage of the space that each person controls. Include any private bathrooms and/or closets in the private space calculation. 

RunHappy

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Re: Charging a SO rent?
« Reply #6 on: March 14, 2015, 08:22:18 AM »
I live with my SO and we split everything  (rent, utilities, groceries) down the middle. 

aschmidt2930

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Re: Charging a SO rent?
« Reply #7 on: March 14, 2015, 08:44:53 AM »
I think charging rent is appropriate.  Now I wouldn't try to squueze every penny I could out of them, but a fair number.

Retire-Canada

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Re: Charging a SO rent?
« Reply #8 on: March 14, 2015, 09:58:01 AM »
I own a couple properties. My SO moved in with me.  At the begining we agreed to pay me what a standard person would pay for renting a room. I've been thinking if this is appropriate? Should we be splitting bills instead? And if so, which? Would that mean we split heat, electricity and internet, but then I pay mortgage and insurance myself? But then again he has his own "man cave" room, which is soley for him.  What would you do?

My GF pays me $1K/month to live in my house.

I pay:

- mortgage + taxes = ~$1400
- utilities/internet
- repair upkeep

Last year all combined where just under $24K.

We split:

- gardening costs & she puts in free labour because she loves it
- home reno costs & she puts in free labour because she loves it

I feel okay with our arrangement because:

- she could have become an owner if she wanted to by putting down $40K when I bought the house
- she can buy into the house anytime she wants by dropping in $40K + some inflation/opportunity cost adjustment
- rental + utilities for a similar house would be $2K/month so she is paying market rate
- if I was living alone I would do no renos nor any gardening
- she is fine with it

-- Vik

MikeS79

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Re: Charging a SO rent?
« Reply #9 on: March 14, 2015, 10:11:49 AM »
I charge my girlfriend 800 in rent which is about 1/2 of what it would cost to rent my condo.  (We share a bedroom so that seemed fair).  I feel like we both make out since its a little cheaper than her getting her own place, she gets to live in a slightly nicer place than she would have got, and I get income I wasn't getting before.

Villanelle

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Re: Charging a SO rent?
« Reply #10 on: March 14, 2015, 10:17:54 AM »
I'm not sure there is one right answer for the specifics, but certainly in most cases the SO should be paying something.

Half of everything (or 1/3, in your case?) might be fair.  OTOH, if you live in a larger, more expensive home than he might have chosen otherwise, I can see an argument against that.  Also, you are getting equity, and he isn't.

Do you think what you are charging him now is actually unfair, or are you just wondering what is most common.  If you feel okay with it, I'd leave it as it, or maybe suggest a small increase if it has been a while since room rates have likely increased.  If you don't think it is quite fair, sit down with him and talk about it.  Explain that since he has the run of the house, rather than just one room like a tenant might, you'd like to see him chip in a bit more.  Maybe asking him what he thinks would be fair would be a good way to approach it, rather than dictating terms like you would for a tenant. 

Vilgan

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Re: Charging a SO rent?
« Reply #11 on: March 14, 2015, 12:02:10 PM »
It sounds like the relationship is still gf/bf and he won't have any equity in the house. So, rent makes sense. When figuring out appropriate rent, what my girlfriend and I did when we first got together when she owned the house was:

We looked at how much I would normally expect to pay for rent and how much I'd been paying for rent + utilities prior to moving in. Then we compared that to what a true 50/50 split of mortgage/taxes/utilities would be. Since contributing a full 50% would have ended up costing me a lot more, we agreed on a rent amount that was slightly more than what I'd paid before but still wasn't 50%. This seemed fair to me, since I wasn't building equity in the house. If a 50/50 split would have been cheaper, we would have likely met somewhere in the middle in the opposite direction.

Then, once we were more serious and considering getting married (but both wanted to keep separate finances) - I bought her out of 50% of the equity she built and we contributed 50/50 everything henceforth. This worked well and both parties were happy throughout.
« Last Edit: March 14, 2015, 12:04:42 PM by Vilgan »

Stupendous

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Re: Charging a SO rent?
« Reply #12 on: March 14, 2015, 01:53:34 PM »
I think it is different for everyone. I don't plan to charge my gf rent as she has her own mortgage to worry about. Her place will get rented out but she still has to worry about vacancies and maintenance. I only expect an increase in water and maybe electric so I might do something there. I'd much rather have her max out her 401k and IRA and manage her own property. Either way it helps us both out for our future.

If you were to charge, I wouldn't charge market rate for rent. It's a SO so maybe below market rent is fair if you were to charge. I would expect half of utilities though.
« Last Edit: March 14, 2015, 02:50:10 PM by Stupendous »

LLCoolDave

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Re: Charging a SO rent?
« Reply #13 on: March 14, 2015, 04:00:09 PM »
I think you had it right in the beginning. I'm in a similar situation but without the SO. I rent out a room in my primary residence and if a SO wanted to move in I would just ask for what my renter pays. ($500)

Briarly

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Re: Charging a SO rent?
« Reply #14 on: March 15, 2015, 07:17:32 AM »
my GF owns a house which we live in, I pay rent- less than she would've charged a regular renter. her income is about half of mine; yet, I am not ready to share ownership of this house, so this works for us. we both buy groceries, though we share most meals. we both clean. she pays for the house bills, although I have chipped in very occasionally when I choose to (ie; I bought us extra firewood this winter).  we re-evaluate our financial choices in relation to each other. living with her has enabled me to pay off some debt - and, I love living with her.

mm1970

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Re: Charging a SO rent?
« Reply #15 on: March 15, 2015, 11:18:24 AM »
Well, here's what I would do:
1. Rent.  He should pay rent for his room, I'd say same as the other roommate, or maybe adjusted by the size of the room.  (When I split an apartment with a roommate, she had the master, so she paid slightly more).  In  my town now, a "room" rents for about $1000 a month.
2. Utilities.  Split 3 ways

Janie

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Re: Charging a SO rent?
« Reply #16 on: March 15, 2015, 04:43:39 PM »
Any reason you're rethinking the original agreement? I'm not understanding the need to change if both agreed it was fair earlier.

Ricky

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Re: Charging a SO rent?
« Reply #17 on: March 15, 2015, 05:19:13 PM »
Presumably this SO shares a room with you and sleeps in the same bed so why would you charge them for a full room? You couldn't otherwise rent it out, so I don't think it's fair to charge market value for a full room. I would think charging half of the going rate for a room in your area would be completely fair. The fact that he gets his man cave is somewhat relevant, but maybe that's being a little picky. I think you should definitely be charging for a room, but not market rate and you should definitely split everything else (household bills) 3 ways.

Ultimately, your SO isn't some schmuck living with you that you have to "deal" with on a daily basis. You presumably enjoy their company. I'm not saying this warrants a free ride at all, since they should definitely be paying bills, but ultimately the SO is only there for you or would otherwise move out. But I get it, the relationship is mutual so there should be weight pulled in both directions.

I'm hung up in my mind whether there is a difference in you splitting rent vs splitting mortgage. For some reason I want to think since you're getting equity, it's a bit unfair to charge them the full market rate when they're not gaining any equity. If you were renting then it would make total sense in my head to split the rent right down the middle. In either situation, they're not gaining equity, so I guess it's no different. I guess maybe I'd settle by saying I wouldn't charge my SO full market rate if I were paying a house off (since you're gaining equity and you're probably saving money by buying), but I wouldn't "not" charge them either.
« Last Edit: March 15, 2015, 07:35:58 PM by Ricky »

firewalker

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Re: Charging a SO rent?
« Reply #18 on: March 15, 2015, 06:25:04 PM »
Depending on how "S" your SO is, you could live separate and charge your SO to be your SO. Cha-CHING!  :-)

mskyle

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Re: Charging a SO rent?
« Reply #19 on: March 15, 2015, 06:44:34 PM »
Talk to the SO, ask him whether he thinks the situation is fair and whether he feels like he's getting value for his money or whether he feels like he's mooching or whether he feels like he's subsidizing your mortgage to an unfair degree. Talking about money is never hard, you might as well start good habits while you're still freshly moved-in! If you're worried he's going to take advantage of you... that's not a great sign for your relationship.

What's fair is what you both agree to. It doesn't matter what strangers on the internet think is fair, it matters what you and your SO think is fair.

If you want this stranger's vote though, I say charge a below-market rent (because you wouldn't rent this space out unless it was to your boyfriend, unless I'm misunderstanding?) and split all the utilities.

MMMdude

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Re: Charging a SO rent?
« Reply #20 on: March 15, 2015, 07:32:29 PM »
I think it's super weird to charge your SO "rent".  Sure, they should pay some of utilities, cable, food, whatever - usually it's too much of a hassle to change bills to the other person so in our case my SO hands over $x ever month to pay for a portion of those bills.  Once these SO's become spouses - either common low or married - will you continue charging them "rent"

mm1970

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Re: Charging a SO rent?
« Reply #21 on: March 22, 2015, 11:56:41 AM »
I think it's super weird to charge your SO "rent".  Sure, they should pay some of utilities, cable, food, whatever - usually it's too much of a hassle to change bills to the other person so in our case my SO hands over $x ever month to pay for a portion of those bills.  Once these SO's become spouses - either common low or married - will you continue charging them "rent"
You see, I totally disagree here, because of the space.

If it's an SO that has their own place and sleeps over a lot of the time, that's one thing.

If they live with you and all their stuff is there?  They need to pay rent.

MMMdude

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Re: Charging a SO rent?
« Reply #22 on: March 22, 2015, 01:54:20 PM »
I think it's super weird to charge your SO "rent".  Sure, they should pay some of utilities, cable, food, whatever - usually it's too much of a hassle to change bills to the other person so in our case my SO hands over $x ever month to pay for a portion of those bills.  Once these SO's become spouses - either common low or married - will you continue charging them "rent"
You see, I totally disagree here, because of the space.

If it's an SO that has their own place and sleeps over a lot of the time, that's one thing.

If they live with you and all their stuff is there?  They need to pay rent.

And when you get married?  Then what?  What about all the stay at home parents- do they fork over a rent cheque to their 'landlord' every moth? With what income?

jpo

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Re: Charging a SO rent?
« Reply #23 on: March 22, 2015, 02:38:02 PM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

mxt0133

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Re: Charging a SO rent?
« Reply #24 on: March 22, 2015, 02:44:57 PM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

Biting tongue.

Villanelle

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Re: Charging a SO rent?
« Reply #25 on: March 22, 2015, 02:45:45 PM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

How is that different than an adult child living at home and contributing nothing?  Or maybe it isn't different to you, and you are fine with both scenarios?

I'd feel taken advantage of, big time, in that scenario.  I'm not trying to talk you into feeling that way.  If your situation works for you, great.  But I would look at it and see that by living with me, he was saving a crap ton of money, and I'd feel like he should pay some of that forward, literally.  It would be costing me money for him live with me, and saving him money, and that would be fundamentally unfair and therefore unreasonable to me.  Also, I don't think I could respect someone who didn't at least attempt to pay his own way in life, unless there were extenuating circumstances of some kind, or we had some other arrangement, like him doing all the housekeeping and cooking.  Or oral sex on demand. 

OneCoolCat

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Re: Charging a SO rent?
« Reply #26 on: March 22, 2015, 03:06:19 PM »
Depends on the relationship and your financial circumstances.  I moved into my GF's house 4 years after we started dating and then went into graduate school.  I didn't make a lot of money and had a lot of student loans so I just paid for most of the food and contributed to property taxes.  Its not an ideal situation for most people but I convinced her it was better for our relationship.  We ended up not making it and I moved out without paying for a couple years of expenses.

Nah, jk, lol.  We are now happily married and she's not sick of my jokes yet.  I'm now making a lot more money than her so I pay for pretty much everything now.  She deserves it and it allows us both to contribute the max to our retirement accounts.  However I wouldn't recommend doing what we did unless you are sure your relationship will result in a marriage.

MishMash

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Re: Charging a SO rent?
« Reply #27 on: March 22, 2015, 03:40:19 PM »
I think it depends.  I moved in with my now husband for a couple of years before we married and bought a house.  I paid no rent what so ever, and I offered.  Instead I took over the utilities, and all of the food cost.  This actually save him about 1000 a month because he literally ate out every. single. meal.  He got better, healthier food, I took the rent payment and threw it at my student loans.  By the time we married I only had about a year left to pay them off, in large part because I lived rent free for two years.  I think it's a circumstance type thing, we'd been dating a good while, he had already started talking about getting married (I didn't really ever want to get married to anyone ever, so this was a new concept that took a bit of getting used to for me) and financially it was beneficial to us both.

I'm a red panda

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Re: Charging a SO rent?
« Reply #28 on: March 22, 2015, 07:09:34 PM »
I think it's super weird to charge your SO "rent".  Sure, they should pay some of utilities, cable, food, whatever - usually it's too much of a hassle to change bills to the other person so in our case my SO hands over $x ever month to pay for a portion of those bills.  Once these SO's become spouses - either common low or married - will you continue charging them "rent"
You see, I totally disagree here, because of the space.

If it's an SO that has their own place and sleeps over a lot of the time, that's one thing.

If they live with you and all their stuff is there?  They need to pay rent.

And when you get married?  Then what?  What about all the stay at home parents- do they fork over a rent cheque to their 'landlord' every moth? With what income?

I don't understand how what happens after marriage has effect on what happens before hand- they might keep doing it this way, they might change.  My husband and I share finances- so neither of us pays the mortgage, we both do- it comes from the general pool.  Friends do seperate income, they pay half and half towards their mortagage.

But before they are married- they are essentially very close roommates.  Why shouldn't the SO pay rent?  Because you date someone with a house/apartment you live free?

jpo

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Re: Charging a SO rent?
« Reply #29 on: March 22, 2015, 07:42:46 PM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

How is that different than an adult child living at home and contributing nothing?
Would you ask the same question when one person stays home and the other works?

There is a large income and asset imbalance between us... it's not much of an expense beyond what I'd use myself (assuming I'd own the house as a single person) and I never have to clean the bathrooms.

Ricky

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Re: Charging a SO rent?
« Reply #30 on: March 22, 2015, 07:54:03 PM »
I think it's super weird to charge your SO "rent".  Sure, they should pay some of utilities, cable, food, whatever - usually it's too much of a hassle to change bills to the other person so in our case my SO hands over $x ever month to pay for a portion of those bills.  Once these SO's become spouses - either common low or married - will you continue charging them "rent"
You see, I totally disagree here, because of the space.

If it's an SO that has their own place and sleeps over a lot of the time, that's one thing.

If they live with you and all their stuff is there?  They need to pay rent.

And when you get married?  Then what?  What about all the stay at home parents- do they fork over a rent cheque to their 'landlord' every moth? With what income?

A stay at home parent is offering a very valuable service: childcare. Otherwise the working parent would be paying for it. And these arrangements exist largely because of that reason alone.

I also don't see your argument for pre vs post marriage. It should be no different. But, you can call it what you want at any rate. Paying utilities/groceries/other/etc. can be the same as "rent".
« Last Edit: March 22, 2015, 08:02:34 PM by Ricky »

Ricky

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Re: Charging a SO rent?
« Reply #31 on: March 22, 2015, 07:58:56 PM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

How is that different than an adult child living at home and contributing nothing?
Would you ask the same question when one person stays home and the other works?

There is a large income and asset imbalance between us... it's not much of an expense beyond what I'd use myself (assuming I'd own the house as a single person) and I never have to clean the bathrooms.

They still have a certain amount that she can spend on these things. No one is saying that because you own a house they  pneed to pay exactly half to live there. But the SO should be paying at least what they would pay to rent a room somewhere, possibly at a discounted rate.

I can't see a healthy relationship where one another respects each other if they aren't both contributing to real world living expenses. It's just a parent/child type scenario then.

MrsCoolCat

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Re: Charging a SO rent?
« Reply #32 on: March 22, 2015, 09:11:15 PM »
LOL DH. Anyways, 50/50 is very fair. Of course if she/he makes less and it just can't be 50/50 then the closest to 50/50. As my DH knows, I harbored a lot of resentment towards him because a woman (or anyone really) can never know her future, and paying for that much upfront is... unfair. It requires a lot of "blind faith", love or whatever each person calls it. It did work out but we had many fights over money issues. Of course if I COULD control the future and know what I live and know now, I wouldn't have bothered stressing myself but you just can never know. Some people are givers and even when it doesn't work out, they wouldn't change a thing. I am definitely not that. There is no single rule for everyone, so good luck!

bludreamin

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Re: Charging a SO rent?
« Reply #33 on: March 22, 2015, 10:08:10 PM »
I notice you mention you have a roommate -  I'm not sure what your arrangement or relationship is with the roommate but  have you discussed with them the implications of their rent?  Speaking as someone who previously was renting a room from someone who had her SO move in  about 3/4 of the way through my lease I think its important that you discuss what's going to happen. In my case my landlord agreed the utilities would now be split 4 way (there was a second renter) but rent price would be the same. I debated this heavily because I was losing utility of some of the common areas including kitchen, living room, and bath (it was a 1.5 bath house). I also lost the second prime parking spot to the SO (garage spot in winter).  Things ended up souring between me and the landlord after all this so I ended up spending more time in my room or out. I also started my hunt for alternate housing a week or so later. 

Villanelle

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Re: Charging a SO rent?
« Reply #34 on: March 23, 2015, 06:14:09 AM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

How is that different than an adult child living at home and contributing nothing?
Would you ask the same question when one person stays home and the other works?

There is a large income and asset imbalance between us... it's not much of an expense beyond what I'd use myself (assuming I'd own the house as a single person) and I never have to clean the bathrooms.

Um, did you read the rest of my post?  I specifically said that a different arrangement, like one party being in charge of the housekeeping, would be different.  Contributing nothing would never be okay, and yes, I would ask that question of married couple where one person has a paying job and the other stays home and *doesn't work*.  if the SAH person is working by taking care of the household, then s/he is contributing.  If s/he's not doing more than half of the household chores, and not contributing financially either, then yes, I would ask the question, and all the same feelings would apply.  There are different kinds of contributions and rent and utilities are only one.  But if a person isn't contributing in a meaningful way (doesn't need to be half, if incomes are unequal) to the finances, then, IMO, they should be finding some way to make up the difference.  If that is cooking and housekeeping, or child rearing, that still looks like an equal relationship to me.

In the end, I don't care if someone has a SO who contributes nothing to the household, because it's not my business. But in my life, that would be utterly unacceptable and I would absolutely feel taken advantage of, assuming there was no mitigating circumstance like a disability, for example. I could never respect a partner who used my free room and board in order to get by, especially if we weren't married and sharing finances.  He'd be saving money, at my expense, and doing nothing to lighten my load in exchange.  In my book, that's freeloading, whether it is parent/child, romantic partners, friends, whatever. 

Oh, and by the way, my husband works outside the homne.  I stay at home.  Not exactly by choice as I left my career so we could move overseas for his, but I am a SAH wife, nonetheless.  And yes, I do "earn my keep" in other ways--I handle all the finances, I cook, I do most of the cleaning, I run most of the errands, etc. 

mskyle

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Re: Charging a SO rent?
« Reply #35 on: March 23, 2015, 07:31:40 AM »
LOL DH. Anyways, 50/50 is very fair. Of course if she/he makes less and it just can't be 50/50 then the closest to 50/50.

I think 50/50 is fair for splitting *rent* (that's what I do right now, and what we'll probably continue to do until/unless the difference between our incomes becomes larger) but not if one of the SOs owns the home - paying half the mortgage payment seems wrong if you're not getting any equity. That said, I'm in an area where buying is generally more expensive cash-flow-wise than renting, so if you're someplace where half the mortgage is actually a *deal* compared to rent then it's different.

I think the reason things become different after marriage is because, in many jurisdictions at least, both spouses will have some kind of legal ownership stake in the home, barring prenups to the contrary.

DKitty

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Re: Charging a SO rent?
« Reply #36 on: March 23, 2015, 07:45:26 AM »
I guess I am the oddball in this thread. My SO lives in my house and pays no rent, utilities or groceries.

How is that different than an adult child living at home and contributing nothing?  Or maybe it isn't different to you, and you are fine with both scenarios?

I'd feel taken advantage of, big time, in that scenario.  I'm not trying to talk you into feeling that way.  If your situation works for you, great.  But I would look at it and see that by living with me, he was saving a crap ton of money, and I'd feel like he should pay some of that forward, literally.  It would be costing me money for him live with me, and saving him money, and that would be fundamentally unfair and therefore unreasonable to me.  Also, I don't think I could respect someone who didn't at least attempt to pay his own way in life, unless there were extenuating circumstances of some kind, or we had some other arrangement, like him doing all the housekeeping and cooking.  Or oral sex on demand.

I have a similar set up to JPO, I live with my SO but pay no rent (I pay a very small set amount every month but it's very small).

He already owns his house and says that I don't really add much on to his bills. I have suggested in the past increasing the amount I pay but he's said that I don't need to.

i did feel a bit bad about it when I first moved in but it seems to work. If I did pay the 'market rate' then I wouldn't be saving and investing as much. I'm on a much lower wage then my SO. He should be FIRE in about 4 years, I'm about 8 years away. If I was paying more in 'rent' then it would take me a lot longer to reach FIRE.

I think you just need to have a conversation with your SO and figure out what works for the two of you.

meyla

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Re: Charging a SO rent?
« Reply #37 on: March 23, 2015, 08:07:43 AM »
I bought a house two years ago and have both my sister and my fiance living with me. They each pay me a flat rate for all-inclusive "rent", though my sister pays about double what my fiance pays. I figure he is getting only half a room and the shared living spaces, whereas my sister gets her own room and bathroom. I don't have them split utilities because I find it a hassle that can easily be covered by an all-inclusive rent amount. We do split groceries.

I think my fiance is happy with the arrangement. He wants to pay something, though obviously not the full market rate for renting a room. It seems fair to me.