What is a fair way to split costs when my girlfriend moves in? (I own the apartment)
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The logic is that she didn't pay any equity into the house. That makes the situation similar to two people sharing the monthly rent on a rented apartment.
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My wife and I lived together for a bit back when we were dating. We did some math:
Combined rent + $savings = my old rent + her old rent
Then we split the combined rent roughly 1/3 - 2/3 (my salary was higher than hers at the time) so that we were both paying less than we had been before.
We split utilities 50/50 which was kind of a mistake IMO -- I regret the accounting chore that it created. One of us would pay the rent by hand (USA, so paper check to the landlord), but utilities were on auto-pay from my account. We'd have to tally up utilities and add it or subtract it to the rent in order to reimburse the other person when they paid the rent.
Instead of that nonsense, I'd suggest estimating your utilities and split that figure 50/50 - then maybe look at it again once a year in case costs change.
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Oh, I think that advice comes from a good place, it's just misguided. People look at it and say "your partner shouldn't be your cash cow".
OTOH, I think it's important for both people to be contributing to the household financially. That helps keep a certain balance in the relationship even if it's just a token amount.
I think it's more important that they come up with a system that they both think is fair. If moving in together leaves one person feeling like they're being taken for a ride, it'll wreck the relationship.
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Your proposal seems fair to me.
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Fair points. I lacked in perspective but you brought me some, so I thank you
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it's the cost of purchasing a house. Two people paying a landlord is more similar to having two girlfriends who pay off the mortgage. This is more like one person sharing the cost of the loan on a house they won't get to keep.
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Ok, but like it also doesn’t seem fair for the non-owner romantic partner to just get free rent, no?
This is more like one person sharing the cost of the loan on a house they won't get to keep.
If the owner sells the property, they will not get back any of the money spent on interest. Thats the point. The assumption is that the principal is the best representation of the portion that the property owner gets to keep.
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Yeah. The only thing I'd clarify is if she is paying rent or contributing to the mortgage. Paying rent is cleaner and she isn't paying half, but it is important to have an understanding about this in case there is a breakup or death.
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Yes that seemed obvious to me but you’re right it’s worth clarifying this is a rent payment, and not a contribution towards the mortgage.
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well to me it doesn't seem fair for the non-owner to help pay off the house and the other getting to own all of it.
The price for owning that house is not just the loan but the interest as well. A home is more than a financial investment, but a necessity. Imagine buying a car that you let your SO use but insisting that she pay a quarter of the cost because the car loses half its value as soon as you drive it off the lot and it's only fair that she pay half of that money thats "lost"
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A car loses its value when you drive it off the lot because it’s a depreciating asset. That money doesn’t go to the bank or the owner. It just vanished.
Homes typically increase in value or at least hold value. When you sell your home, you won’t get back any of the money you gave to the bank as interest, but in theory everything else including your down payment will be returned to you.
So to me it makes sense that while a partner is living with you and if they are committed to helping pay for utilities and whatnot, they can also contribute to the cost of living at the home. I believe helping to pay the interest is a fair an equitable way to do that.
I mean when you’re renting a place you’re more than likely helping the owner pay off their loan anyway. It’s just another step removed.
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I mean when you’re renting a place you’re more than likely helping the owner pay off their loan anyway. It’s just another step removed.
and you think thats fair???
