Friends, Rent, and Thin Ice: What to Know Before You Sign Together
- Rich Arzaga
- 2 days ago
- 2 min read
by Rich Arzaga, CFP®, CCIM, The Real Estate Whisperer®
Question: How should two people split rent when one earns significantly more than the other?
Answer: Start by choosing the proper framework: Will your arrangement take a business or an emotional approach? This single decision shapes everything that follows.
1. Emotional Approach
This is where many couples, friends, or partners begin—especially when one person earns more than the other. Income differences naturally introduce emotion into the conversation, which makes “fairness” subjective and harder to measure consistently.
For example, a higher-earning partner might feel they should contribute more, while the lower-earning partner may feel uncomfortable or uncertain about what’s appropriate. These feelings are valid, but they can lead to inconsistent or unclear agreements.
The emotional approach can work, but because it’s subjective, the outcomes can vary widely.
2. Business Approach (recommended for clarity and fairness)
If the goal is to avoid confusion, preserve the relationship, and keep things objective, treat the living arrangement the way any two co-tenants would.
A. Put agreements in writing.
There are two agreements worth creating between the two parties:
Intra-lease agreement – between the two of you (not the landlord), covering:
Rent and utility division
Payment deadlines
What happens if one person moves out
How to handle early termination
Roommate agreement – a code of conduct addressing:
Guests and visitors
Pets
Quiet hours
Cleanliness and shared responsibilities
Privately used spaces (e.g., bedroom + private bathroom)
These should be written and signed, otherwise they carry little weight.
For guidance, consider:
Consulting an attorney who drafts cohabitation or roommate agreements, and/or
Asking a university housing office or city housing department for best-practice templates.
B. Choose an objective method to divide the rent.
Method 1: Room-Size Ratio (common area not counted)
This keeps it simple. If one private room is larger, that person pays more.
Example:
Room A: 300 sq. ft.
Room B: 200 sq. ft.→ Ratio = 3:2 → 60% / 40% split
This method works, but it does not account for shared living space.
Method 2: Total-Space Method (includes shared areas)
This provides a more complete view of the usable space each person has access to.
Steps:
1. Calculate total shared space (living room, kitchen, etc.).
2. Divide it by two.
3. Add that amount to each person’s private space.
Example:
Shared space: 800 sq. ft. → add 400 sq. ft. to each
Total spaces become 700 sq. ft. and 600 sq. ft.→ Ratio = 7:6 → 54% / 46% split
This more accurately reflects each person’s benefit from the home.
Summary
Whether you are partners, friends, or a couple, the key is clarity. An objective method, along with a written agreement, makes the arrangement predictable, fair, and far less emotionally charged—especially when income differences are part of the conversation.
Written by Rich Arzaga, CFP®, CCIM, Founder, The Real Estate Whisperer® Financial Planning. Helping clients and advisors integrate real estate into holistic financial plans.
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