Tension-Free Cohabitation: Important Financial Questions to Ask Your Roommate(s)
Money conversations can be uncomfortable—but crucial if you’re sharing an apartment with someone. You need to talk it out before you move in together. Discuss guidelines, and expectations, and ensure that you will both be able to cover everything from damaged furniture to security deposits.
Talking it out in advance will save you from confronting difficult situations down the line, and figuring out finances will help you decide the price range of your apartment. This includes the budget for rent, bills, and household supplies.
Having open conversations upfront will set a baseline and prevent future misunderstandings. Once you’ve vetted your roommate, it’ll also help you avoid trouble with your landlord. Something that could cost you in future apartment searches, since your next landlord will often ask the previous one for references.
So, let’s take a look at what you can do to make it financially easy to pay rent with a roommate.
Financial Questions to Ask Your Roommate(s)
With friendly boundaries now established, it’s time to get to the nitty-gritty of cohabitation. Ask these questions to get a clear picture of where you both are financially, making your living situation smooth-sailing:
1. How much rent can you comfortably pay?
This will help you set a budget, determining what and where you can rent. There’s no need to disclose exact salaries, but at least give a ballpark of what each of you can realistically afford. This way, neither of you is paying beyond your means.
The industry standard is that rent is a max 1/3 of your income. In other words, you and your roommate’s combined income should be 3x the cost of your rent. Following that, factor in security deposits, advanced payments, and monthly utility costs, too.
2. What is our rent payment system?
Figure out how you and the roommate will pay for rent. Here are some more questions to ensure that both of you are aligned with the rent payment system:
- Will you pay them, or will they pay you?
- Who will send the payment to the landlord?
- Will you split the cost and send it to the landlord separately?
- How do you split the rent?
Settle this early to avoid future mix-ups, and remember to stick to the system. You may be friends with your roommate, but messing with the rent payment system will only cause difficulties down the line (e.g., if they insist that they’ve already paid their share, but you know that they haven’t!).
3. Do you have emergency funds?
Unexpected and unfortunate events happen at any time, so it’s important to be prepared for eventualities. Of course, there’s no covering everything. Still, both of you should have savings set aside for property damages, broken appliances, or rent increases—which might often happen, depending on the neighborhood and state.
This will also give you insight into your potential roommate’s sense of financial responsibility. If they’re conscientious enough to have funds saved up, they’re likely a reliable person to rent with.
4. How do we split bills and supplies?
Remember that there’s so much more to budget for than just rent. Rent is only one small part of what it costs to live independently from your family.
So, does one person cover utilities while the other covers groceries? Is it an even split, or should you simply cover your own food? Are you willing to share, or do you prefer to be hands-off? Is one person in charge of household supplies like soap, cleaners, etc?
Establish a system early on, so no one’s confused when you’re actually living together.
Subscriptions, such as Netflix, YouTube, Amazon, and others, are something else to factor in, too. See if you can consolidate some and co-pay subscriptions, so you save some money. You might also need to sort out the internet when you move in, by either transferring your existing provider to your new house or signing a new contract.
5. Should we get separate renter’s insurance?
If an incident occurs—such as a stolen item or a dog bite—you may qualify for renter’s insurance. This will help cover the cost of replacements, alongside any applicable medical or legal bills. In some cases, renter’s insurance is a requirement on your lease, so double-check to make sure.
Your own insurance provider may allow you to list your roommate on your policy, but it’s more beneficial to get separate coverage. This way, you’re not raising each other’s premiums or costs, and you’re both covered for any eventualities.
6. Should you use rental acquisition services?
It takes a lot of time and effort to search for a good apartment that you both agree on. You may have limited time to do an apartment search, have conflicting schedules, or just don’t know where to start in the real estate market. In these cases, it’s always good to seek a helping hand.
Rental acquisition services cover property searches and can help you hunt down a good place to rent. It may cost more upfront, but it could benefit you in the long run and save you the effort of going through it on your own.
Beyond that, rental acquisition services cover apartment inspections and evaluations to make sure your new apartment is livable—and that there are no underlying issues that might catch you by surprise later on. They can also help with repairs and renovations that you’ll need in the future.
7. What happens if one of you can’t pay your share?
Now, you chose to have a roommate to ease the financial burden. But what do you do, then, if they can’t pay rent? Here’s how you can get out of the tricky situation:
- If Only Your Name Is On the Lease: If you’re the only one on the lease, regardless of what you and your roommate agreed on, then you’re legally liable to pay rent in full. This means you have the power to evict your roommate, replace them with someone who can pay rent, or take them to small claims court.
- If Both Your Names Are On the Lease: If both you and your roommate’s names are written in the lease, then both of you are liable for paying rent. But your landlord has control over what happens when rent isn’t paid in full. They may evict you and your roommate or take both of you to court.
- If Only Your Roommate’s Name Is On the Lease: If you’re not part of the lease, then your roommate takes on full responsibility. Whether you pay the rent or not, it’s your roommate who’ll be at risk of legal consequences.
Whichever the situation is, however, avoid any legal complications by talking it out with your roommate. Find a solution as soon as possible, or both of you will be at risk of losing the rental.
Here are a few solutions for you to consider:
- Talk to your landlord about the situation. They may offer you some flexibility like setting up a payment plan to pay the missing rent over time.
- Look into rental assistance to fill in the financial gaps and have additional resources.
- Pay your roommate’s portion and set up your own payment plan for reimbursement. Put it all in the contract so your roommate is legally binded to pay you back.
The Importance of Setting Financial Guidelines
Establish monetary rules and standards early so that everything is clear from the beginning. This leaves little room for error or confusion, and lets you know what to expect ahead of the actual move-in. Make sure to document the agreements for future reference as well.
By having these conversations up front, you can prevent financial issues down the line. You’ll avoid trouble with each other and your landlord, too. Finances are an important aspect of any relationship—so be honest about them. Then, you’ll have an easier time living with each other.
Logical Property Management offers a full range of rental acquisition services. You can book a consultation, a property search, or even a property inspection—all of which will ensure your potential apartment or home is habitable and within budget.
Contact us today and let us help you find your new home.