Splitting Rent In A Share House

09/11/2015 11:41 AM AEDT | Updated 15/07/2016 12:51 PM AEST
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Close up of lease agreement empty document with pen

While the property boom has put purchasing a home out of reach for many young workers, an increase in housing stock has prompted stable rents and better conditions for many renters.

And as people are seeming to stay in rental properties for longer, and until they're older, it prompts the question -- how should modern share-house dwellers split the costs?

"When it comes to splitting rent between a group of tenants there are a few things that need to be taken into consideration, as rarely all rooms are the same. The percentage breakdown of the overall rent should be based on the room features and sizes. Some may be much bigger, have an ensuite, balcony, better light or outlook or built-ins," Justin Ferguson, director of Justin Ferguson Property Specialists told The Huffington Post Australia.

Charlotte Pascoe, Business Development Manager at Melbourne Real Estate agrees. "It depends on whether the rooms and amenities are of equal size and features are equivalent. If there were to be a three-bedroom house, for example, and all rooms had robes and were of similar size, then it would be fair to split the rent equally."

While that may seem obvious to most, things can get tricky when you factor in a couple in one room, within a share house. Some believe the couple should be paying for the room, while others debate that the couple should pay more as there are two of them.

"When you introduce a couple -- two people in one room, you would expect the couple to contribute a higher amount for rent. You could even go so far as to split the rent per person, as the couple would usually end up in the biggest room, which makes it more logical for them to pay a higher amount," said Pascoe.

"Even if they are not in the largest room, there is essentially an extra person in the house and this impacts on the other tenants and the space they have to enjoy in the property. The bills (like Foxtel and electricity) should be split per person."

Ferguson adds, "If you a have couple sharing one room, many may think the cost should be based on a per room cost, but you need to take into consideration the facilities being used, like sharing the bathroom. In my opinion couples should pay slightly more as there is an extra person using the facilities. So establish what the room rate is and increase by 15 percent for the couple."

Couple or singles aside, extras like a balcony, ensuite and car spot also need to be factored in.

"Inner-city carparks are at a premium and there is a shortage. For Melbourne CBD, market value would sit at around $50-$80 per week. With new developments being built, many councils are not issuing any permits for the area, making it impossible for other occupants to have cars," said Pascoe.

"Balconies and ensuites would certainly attract premium rent as it will provide that tenant with their own space the other occupants would not be able to use. Perhaps an additional $20-$40 per week depending on size," said Pascoe.

Ferguson said that it's paramount that all tenants agree on "house rules" prior to moving in and refer back to them if ever there are issues. "having the 'rules of the house' in writing is the best way to avoid disputes in the future."

"If a tenant moves out mid way through the tenancy, be transparent to any potential tenant looking to move in and explain the setup for the house and why, so there are no nasty surprises for the new occupant down the track."

Above all, Whitney Cali from tenancy application system 1Form.com, said you need to be on the front foot.

“Compared to last year, 1form.com has seen 40 percent more applications in our system, with demand across all Australian Metro cities driving more competition than ever before. For tenants this means you need to be on the front foot for the whole application process," she said.

Make sure all tenants residing in the property are on the lease and the bond lodgement with the RTBA so everyone is accountable for rent due and the way the property is maintained throughout the tenancy.

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