Three Ways to Split Rent and Costs With Roommates

When Alexis Campestre recently moved in with two friends in Los Angeles, he was between jobs and had no cash flow while he tried to start a business. So he agreed to cook, clean and do laundry in exchange for rent. Now that he's landed a job and continues building his business, he plans to start contributing.

Splitting up rent and household expenses can be tricky, especially if you and your roommate have disparate incomes.

"Since, in most cases, the roommate relationship starts as a contract about saving money, a major imbalance in contribution to household versus personal spending can be a source of trouble," says Annamarie Pluhar, author of "Sharing Housing: A Guidebook for Finding and Keeping Good Housemates."

Here are a few options for divvying up rent as well as tips on getting everyone to contribute.

The 50-50 Proposition

One option is to divide everything equally regardless of incomes. It's often the simplest way, and it avoids one roommate subsidizing the others and potentially growing resentful, says Ornella Grosz, author of "Moneylicious: A Financial Clue for Generation Y."

Grosz also suggests divvying up the monthly bills so there's a utility or cable bill in each person's name. "It's a good time for college students and recent grads to build their responsibility," she says. This also creates a cooperative environment.

Splitting the rent and utilities four ways has worked well for Amy Grizzle, a small-business owner in Acworth, Ga., and her three roommates. Grizzle says she's in the middle in income, but they split everything evenly, including utilities. However, one of Grizzle's roommates recently moved out, and Grizzle stepped up to cover the extra rent because she's the one who collects rent checks and mails them in each month.

"Although it made my budget a little tighter, it kept the house peaceful, and they took the lead in putting out ads to find a replacement," she says. Next time, she might split the cost of that extra bedroom evenly among the roommates.

Percentage of Income

In some apartments, roommates split up expenses according to a percentage of their incomes. For example, if one roommate earns $100,000 per year and the other makes $30,000, the higher-earning roommate would pitch in more each month. But according to Grosz, splitting the rent based on income is more common with couples than with roommates.

However, there may be some cases, such as Campestre's, where it makes sense to adjust financial contributions based on other types of contributions. In situations where one person is paying less rent in exchange for extra chores, those responsibilities should be discussed in detail so expectations are clear.

For instance, "you will do the cooking so many times a week for maybe a month or a couple of months," Grosz says. "If you're going to cook, you have to truly cook a real meal. The roommate has to see value."

Bedroom Size

Instead of splitting rent based on income or going the 50-50 route, some roommates factor in room size and access to other amenities such as a parking spot, private balcony or master bathroom. The person with the lower income could agree to take the smaller room and pay slightly lower rent.

When rooms are of unequal sizes, Pluhar suggests using the rent-splitting calculator offered on the online roommates' resource to get a ballpark suggestion on what each person should pay and then adjusting based on a conversation with roommates.

House Rules

Whatever type of split you prefer, here are a few ways to ensure your roommates hold up their end of the bargain.

  • Agree on who pays what before moving in. Before you sign a lease or move in with roommates, get clarity on how rent and other expenses will be divvied up and make sure everyone is comfortable with the arrangement. "You wouldn't take a job without knowing the salary and benefits package, right?" Pluhar says. If someone suggests changing the rent distribution after you've moved in, it can feel like a bait and switch, so it's best to hammer out the details in advance. "A lot of housemate situations go sour when the terms change from what was agreed to," Pluhar says.
  • Sign a roommate agreement. In addition to verbally discussing rent and other details, put them in writing with a roommate agreement. Grizzle says she's planning to get a roommate agreement that will solidify the house rules and what happens when one person moves out. According to Pluhar, a roommate agreement should cover issues such as cleanliness and neatness, guests, kitchen use, daily routines, tasks, noise, and monthly bills. And because leaving on electrical appliances or adjusting the thermostat can drive up utility bills (assuming utilities aren't already included in the rent), those should also factor into the conversation.Roommates' agreements aren't just for legal protection. They also spur roommates to discuss expectations in advance and get everyone's agreement.
  • Keep an emergency fund. Financial author Grosz says roommates should have "a bowl or a box where each person puts in $50 or $100 as kind of an emergency fund, so if somebody comes up short, they can dip into that fund." If a roommate dips into it, that person would have to pay the money back. Each roommate would remove his or her contribution when moving out. A shared money pot also could go toward buying household staples such as paper goods and cleaning supplies, Pluhar says.