They say sharing is caring, but living in a share house can be far from pleasant if the rules about splitting expenses aren’t well established.

Savings expert Kylie Travers explains how to decide who pays what, in order to avoid financial fistycuffs.

For starters, Travers recommends setting ground rules before you move in, so everyone knows what is expected from them. And she also suggests getting these rules in writing, so there’s no ‘he said, she said’.

“Having it written out – who pays for what and what percentage or amount – means when the bills come, it isn’t an awkward conversation,” she adds.

It’s possible to have a happy and healthy living arrangement with housemates. Picture: Getty

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How much rent does each person pay?

The first order of business is deciding how much rent each person should pay.

Travers says how you fairly split the rent between housemates will depend on the house, the facilities and who is running it.

“If you’re setting up a house with mates, you can choose to split the house in different ways to make it even. But most share homes are established or run by one person,” she says.

“And the easier way to do it then is by making each room a specific amount, depending on the prices in the area.”

A bedroom with an ensuite and walk-in robe should cost more than a bedroom with a shared bathroom, for example.

“Everywhere I have rented out rooms, the [rent for the] larger room was more, even if only by $10,” says Travers, before adding that a master bedroom with a larger robe and an ensuite often equates to $50 or more a week in value.

Other perks, like a garage spot, should be reflected in the room’s rent too, especially if there is only one spot.

“You need to work out who has what and what each bit is worth. In some scenarios, though, it could be an even split: one person gets the regular bedroom and the garage, while another gets the master with the ensuite,” she says.

When it comes to deciding how to split rent between housemates, some easy methods include:

• Write down what you think each room is worth

Having each housemate jot down the price of each room can help you start the conversation. If the prices match up, then it’s a very simple process; if not, then at least you have some idea of what to expect from the ensuing negotiations.

• Split rent based on bedroom features

An ensuite and walk-in wardrobe add luxury and value to a room. Housemates should take into accounts these added features when discussing how much a room should cost. Balconies and parking spaces should also be considered.

• Calculate rent on room size

It’s hard to argue against data. So, for those who are good at maths, figuring out the cost per square metre could be an appealing option. This method will help in share houses with a granny flat or a less traditional floor plan. However, basing the rent of a bedroom on size doesn’t take into account extra amenities, or access to other key areas of the house.

• Consider charging more for couples

Even though a couple shares a bedroom, they are both using the common areas of the house, such as the kitchen and living room, which is important to remember when splitting rent. Overall, having a couple in a share house can be appealing, because it often makes rent cheaper. Experts recommend charging couples between 15 per cent and 40 per cent more for a room.

How much does each person pay for bills?

When it comes to splitting bills, an even split is often the best approach, as it can be tricky to track individual usage.

You should interview potential housemates about their usage and habits before moving in together.

This way you can ensure that you’re living with like-minded people and that you’re on the same page when it comes to electricity usage and payments.

If you end up in a situation where one person is using electricity non-stop, you need to come to an agreement.

“For example, I lived with someone who wanted the air-conditioning on overnight. They paid the extra for that convenience,” Travers says.

While most people have mobiles for phone calls, removing the need for a landline, fixed internet charges can be split.

“You can get cheap unlimited plans and split the cost. [Either that], or each person can have their own portable internet,” Travers says.

Find out about a potential housemate’s internet usage before they move in.

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Sharing food costs between housemates

Food costs can also be shared. The best arrangement will depend on your housemates’ preferences.

In some share homes, it works well when everyone chips in for food and shopping.

“Or you can have a kitty for communal expenses, such as milk and bread, but everyone buys everything else themselves,” says Travers.

“If you are living with someone who is super strict about the way they eat, [who is] on a special diet or fanatical about money, it’s easier for everyone to do it themselves and not bother splitting the groceries.”

This article was originally published on
26 Aug 2019 at 9:00am
but has been regularly updated to keep the information current.

Rents in Canada are so high that minimum-wage earners have to allocate much of their full-time work hours to cover the average cost an apartment, thereby jeopardizing their push for financial independence, according to a new report by Zoocasa Realty Inc.

“Financial independence and stable housing have long been seen as markers of adulthood, but for many young Canadians, these milestones are slipping out of reach,” the report released on Aug. 10 said.

The Zoocasa report said 29 of the 60 cities it looked at required minimum-wage workers to dedicate 120-plus hours of an average 174-hour work month at eight hours a day to cover their rent. People in only eight cities could work less than 100 hours a month to cover rent.

But in North Vancouver, a minimum-wage employee would need to direct 95 per cent or 164 hours from the month toward rent, based on a provincial minimum wage of $18.25 and the average rent for all apartments, which is $2,983.

The other top five cities where rent gobbles up the most working hours are clustered in British Columbia and Ontario.

In Vancouver, 87 per cent of their hours worked would need to be earmarked for rent, while it’s 84 per cent in North York, part of the Greater Toronto Area (GTA), tech-hub Kanata, just outside Ottawa, and the City of Toronto.

The report said all the areas in the GTA were “uniformly high-cost,” requiring between 118 and 146 hours of work.

Ontario had the widest variance between hours needed to cover rent, ranging from the lowest at 95 in Sarnia to a high of 146 hours in North York.

Zoocasa said the cross-provincial gaps are due to the cost of rent rather than to different minimum wages.

“Since provinces set minimum wage uniformly, any variation in the number of work hours needed to afford rent comes entirely from differences in local rent levels, making rent the key lever for closing the affordability gap, not wage policy,” it said.

For example, B.C. has the highest provincial minimum wage at $18.25 an hour, but that isn’t helping with affordability. Four B.C. cities ranked among the top 10 for most hours needed to cover rent.

Alberta, meanwhile, has the lowest minimum wage at $15 an hour. Affordability problems have risen in communities around Calgary.

In Airdrie, just outside the oil capital, workers need to dedicate 79 per cent of their work hours to rent compared with 73 per cent in Calgary.

The situation is better in other Alberta cities such as Edmonton, Red Deer, Lethbridge and Medicine Hat.

In Saskatchewan, where Zoocasa said “rents haven’t escalated the way they have in B.C. or Ontario,” 95 hours of work in Regina will cover rent.

Halifax ranked sixth for the number of hours needed to cover rent at 143, or 85 per cent of people’s time on the job. The most affordable place nationally was St. John’s NL, where 74 hours of work would cover rent for the month.

However, rental affordability could remain elusive.

A Rentals.ca report last week said national rents fell four per cent in July from a year ago — the 22nd annual consecutive rental decrease — bringing the average asking rent to about $2,037. But it said overall annual decreases in rent are slowing and they are rising month over month.

“Canada’s rental market is showing signs of stabilizing, but not yet recovering,” said Shaun Hildebrand, president of Urbanation Inc., owned by Landlord Web Solutions Inc., which is also the owner of Rentals.ca.

In Toronto, rents have increased month over month, is on the verge of posting a year-over-year increase and could be “a leading indicator” for where the market is headed,” he said.

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It’s the news no tenant wants to hear: the rent is going up.

But while no one wants to fork out more cash than necessary, it is possible to survive a rent rise – using a healthy dose of realism and some planning.

Belinda White, who runs The Fierce Girl’s Guide to Finance, a “financial literacy resource for smart women”, says it’s wise to plan for potential rent hikes.

“Rental rises are governed by laws in each state and the restrictions on how often they can be imposed, and by how much, varies from state to state, so there are some protections for you as a tenant,” she says.

Try and save money above and beyond the rent for emergencies, but also long-term goals like a home deposit. Picture: Getty

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“However, it’s best to assume that rent increases are a fact of life every year or two. Then, if you don’t get one, happy days!” White says.

Tentants’ rights: 6 things you can do in a rental property

Tenants should factor in possible rent hikes and not choose a property which stretches them to their limit, she says.

“The bigger buffer you give yourself with fixed costs like rent, the easier you’ll sleep at night.”

White says consistently putting money away can also help soften the blow.

“It’s always a good idea to have an emergency fund for anything life throws up at you; ideally at least three months’ living costs, ie rent, bills and groceries.

“But even a month’s savings is better than nothing and can really help get you out of a pickle, without resorting to costly credit cards,” she says.

Another trick is to offset rent rises by keeping a close eye on the other costs of renting, like insurance, internet and energy bills.

“You can often get a better deal after a year or two by shopping around or negotiating with your current provider. Don’t be afraid to talk them down,” White says.

For many tenants, a rent rise prompts them to consider moving, but don’t be rash.

“Don’t be afraid to negotiate! As annoying as it is to move, it’s also annoying for a landlord to find a new tenant. Check the local market and see if you can convince them of a reasonable amount,” she says.

“If it really is a done deal, do the sums. Is the annual cost as much as a removalist? What about the mental stress? It’s going to come down to the questions of can you afford the extra rent and the extra stress?” White says.

Renting can also be a “dry run” for life with a mortgage, according to White.

“Renting is definitely the time to form good habits that set you up for success later. Find a budget system that works for you; whether it’s an app, a spreadsheet or a nice notebook. Track your spending and look for leakages,” she says.

White recommends a free budgeting app from the Federal Government called TrackMySpend.

“It can be a real eye-opener! Try and save money above and beyond the rent for emergencies, but also long-term goals like a home deposit.

“There are advantages of renting, but in the long-term, home ownership can provide the peace of mind that comes with ‘owning your own patch’ and is often a good way to build wealth,” White says.

This article was originally published on
12 Sep 2019 at 11:00am
but has been regularly updated to keep the information current.

Sharing a house is a lot of fun, but there will likely come a day when you’ll want to go it alone. That doesn’t mean, however, that you’ll necessarily need to earn a whole lot more cash. 

Here are a few ways to make solo living work, while saving enough cash to still do the things that you love.

1. Be a professional house sitter

If you’re keen on living alone but don’t want to fork out for an expensive apartment all to yourself, then consider house sitting.

There are plenty of reputable house sitting websites you can apply for, and once you’ve signed up, you can house-hop and not have to pay rent for months at a time.

You may have to take care of pets and do some minor maintenance, but, all things considered, it’s an excellent way to save money and experience living in a variety of different settings.

House sitting can be a great way to save money and retain your independence.

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2. Rent a studio

Studio apartments generally have a kitchen, lounge room and bedroom in a single room.

Whilst some couples may be able to live in studio apartments, they are generally designed for a single occupant.

The great thing about studios is that the rent is much cheaper than other single-bedroom apartments, and they are generally located in central areas, which means you get to live in a trendy location, without paying the hefty rent that usually goes with it.

3. Commit to a longer lease

If you find the perfect little flat and you can see yourself living there for a while, it might be worth negotiating a 24-month lease with the landlord, in return for a slight reduction in rent.

Finding suitable tenants can be an arduous process for landlords. It takes time and costs them money, as vacancies mean lost rent. So committing to a two-year lease could encourage them to knock $10 off your weekly expenditure.

A longer-term lease might offer a better deal.

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4. Wait it out

There are times of year when rents tend to increase and flats become harder to find.

The beginning of the year, for example, is often a difficult time, as it’s when students start university and relocate to different cities. This means the rental market is usually in a frenzy from January to March.

If you have a bit of leeway, pick quieter times of the year to look for a flat; you’ll have more choice, and, if you’re the only person applying to live in a vacant apartment, you’ll have a lot more bargaining power than those competing with a dozen other people.

Keep your 1Form application up-to-date all the time, as this will allow you to pounce on a great rental as soon as you see it, making it much easier to exploit off-peak rental periods.

5. Live in the suburbs

Generally speaking, the further away from the centre of the city you get, the cheaper the rents will be. Think about your lifestyle, travel habits and social life. And then choose a cost-effective suburb that allows you to maintain as much as your current way of life as possible.

Don’t rule out any suburbs until you’ve thoroughly researched them, either. The housing market is constantly changing and suburbs are being transformed with new builds. It might pay to revisit suburbs you ruled out a few years ago to see if they now fit your requirements.

A rental further out from the city may be cheaper and offer a more relaxed lifestyle.

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6. Take advantage of any extras

When comparing different apartments, make sure to factor building amenities into your calculations, too.

You could save money on a gym membership by using the gym in your apartment complex, or on venue hire for your next party, if your apartment building comes with a cool rooftop terrace.

An apartment with a car park presents another great saving, too, eliminating the need for costly permits or street parking. Likewise, close proximity to a cheap supermarket could save you heaps on your weekly grocery bill.

7. Compromise

Remember: Signing a tenancy agreement doesn’t lock you into an apartment forever, and building some savings in your 20s is always advisable. After all, you can always live in a swish pad once you’ve made it.

So, consider looking at older flats, rather than state-of-the-art, inner-city condos. They’re a lot cheaper, and some are quite charming, too.

This article was originally published on
16 Sep 2019 at 9:00am
but has been regularly updated to keep the information current.

As the name suggests, Rent Assistance is a payment from the government to help people pay their rent, but not everyone can get it and the amount available varies.

For those who have ever wondered, “how much is rent assistance?”, here’s the lowdown …

What is Rent Assistance?

Rent Assistance is a regular payment from Centrelink for people who already get certain payments from the government – and have to pay rent, naturally. 

How does rent assistance work?

Based on the information it already has on file, Centrelink assesses a person’s eligibility for Rent Assistance when they claim another payment, like the Newstart Allowance.

The actual amount provided depends on how much rent a person pays and several other factors.

Centrelink will use the information they have on you to assess your eligibility for Rent Assistance. Picture: Getty

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Who is eligible and how much can I get?

Rent Assistance is available to those who pay rent and either;

• get certain payments from Centrelink;
• get more than the base rate of Family Tax Benefit.

Recipients must also pay one of the following:

• rent;
• fees in a retirement village;
• lodging;
• board and lodging;
• site or mooring fees if their main home is a caravan, relocatable home or a boat.

There’s a minimum amount of rent people need to be paying in order to get Rent Assistance. For every $1 of rent paid above this amount, people get 75c and there is a set maximum amount.

The amount of Rent Assistance you will receive from Centrelink depends on how much rent you pays and several other factors. Picture: Getty

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People without dependent children

People with dependent children

People in different circumstances

Special rules apply for single sharers or those who pay board and lodging. For those who pay board and lodging, Centrelink works out the payment based on the lodging portion only.

If it’s not possible to split the two, Centrelink uses two-thirds of the total amount paid.

For those under 25

For people under 25, the rules about Rent Assistance depend on both the payment type the person is on and if they live with a parent. 

For those living a retirement village

When it comes to people living in retirement villages, the eligibility equation is a little complicated, as people must be assessed by Centrelink as a “non-home owner” to be eligible.

If you live in a retirement village, to qualify for Rent Assistance you will need to be a non-home owner.

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Centrelink decides if a person is a home owner or non-home owner by looking at how much a person paid when they entered a retirement village. If eligible, the amount of Rent Assistance paid is based on the ongoing fees in the village.

Who isn’t eligible?

Rent Assistance isn’t available to everyone.

Those not eligible include people who:

• lease from a state or territory housing authority;
• own or are buying the home they live in, except relocatable homes;
• are travelling away from the home they own for less than 12 months;
• live in a residential aged care facility that receives an Australian Government subsidy;
• have a partner who gets rent assistance with Family Tax Benefit;
• who get an allowance or have a partner who gets Rent Assistance with their pension.

How do I apply for Rent Assistance?

Generally speaking, people aren’t required to actually submit a claim for Rent Assistance. Based on the information it already has on file, Centrelink assesses a person’s eligibility when they claim another payment.

As with all Centrelink business, people should keep their details up-to-date on the myGov website to ensure they are getting their full entitlement.

In some cases, Centrelink may ask for a Rent Certificate to be filled out, to prove rent is being paid. This is can be done via myGov, by post or at a Centrelink service centre.

This article was originally published on
7 Jan 2020 at 9:00am
but has been regularly updated to keep the information current.