How to split bills with a girlfriend if you own 100% equity
Seattle, WA · Member since 2017 · 8 posts · 10 votes
How to split bills with a girlfriend if you own 100% equity
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Flipper · Pittsburgh, PA · Member since 2017 · 218 posts · 345 votes
9y@Alex Johnston
This is not going to end well.
78 Replies
I would check the legal issues in regards to her ability to have any claim to your asset in the event that you split.....if her paying ANY form of rent etc may allow her to make claims to the house, then no way,.... that option is a dead deal right there, no point in even considering the option for her to contribute to the mortgage
Personally I would keep the house in my name and pay the mortgage myself.....its my asset and I will take ALL the tax credits and all the future equity....everything else..... groceries, utilities, furniture, vacations etc would be split 50/50.... I hate the " I'll pay utilities, and you buy groceries"....... that never ends up being even and it will eventually lead to a conflict if someone thinks they are getting the short end of the deal....anything that you both use, gets paid for 50/50 except the house and the typical CapEx stuff....
- Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes9y
People will interprete the situation as they feel is fair and square to THEM.
It has nothing to do with enforceable law which needs to be researched for each prospective state.
Example: my daughter lived in my property with her boyfriend, they were paying taxes, HOA ($600+/mo), obviously electric etc.
If they wanted to claim the ownership of the condo on that basis, that would be just funny :)
Contract or no contract - people contribute as they agree and nobody knows where the money goes: toward food/cars or mortgage/HOA fees
You guys make everything complicated.
As for relationship aspect - you're better off to not go through that - money is number 1 reason for people to divorce. Not money per se but the financial outlook, saver vs spender etc. Unless you want to tell your girlfriend that she is just roommate. Maybe it solves the problem in the first place :)
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes9y
Good luck on this one .
- Investor · Redlands, CA · Member since 2013 · 177 posts · 76 votes9y
I hate to Dave Ramsey somebody on BP,
But until you marry her she's your roommate. Or tenant I guess in this case.
So have her sign a lease and pay you.
Not sure if I could do that if it were me, but it's another perspective
- Glendora, CA · Member since 2016 · 106 posts · 21 votes9y
@Alex Johnston I anticipate running into a similar situation Good Post... It's hard to find a life partner you have the same ideology with considering that costs of living are going up and both parties want to be treated fairly.... I Think the best thing to do is realize that your a real estate investor and she is not... therefore you shouldn't mix the two things up regardless if your serious with her or not. I would consider getting and sharing expenses 50/50 (if possible) in a low cost rental SEPARATE from your investments this would eliminate any kind of conflict of interest Now and into the future... Good Luck
- Attorney / Multifamily Investor · Houston, TX · Member since 2009 · 173 posts · 136 votes9y
@Jason G. What you are saying is incorrect under Texas law. You cannot acquire an interest in real estate by paying part of the mortgage. All real estate transactions in Texas must be in writing to be enforceable. Stop giving bad advice.
@Alex Johnston don't listen to this guy. Don't listen to me, for that matter. Do some research or consult a Texas attorney for real.
- Attorney / Multifamily Investor · Houston, TX · Member since 2009 · 173 posts · 136 votes9y
Originally posted by @Jason G.:
@Alex Johnston, you are likely receiving a mortgage bill every month from your lender which includes principal/interest/escrow. If someone contributes to that bill, they are arguably contributing to the principal payments (equity) in the property. The concern would be that the relationship deteriorates and your partner turns around and says for so and so years she has been contributing $x towards the mortgage payments and therefore has $x amount equity in the property. If you enter into a legal contract such as a lease with someone then that isn't the same situation, but your original post specifically stated, "50/50 everything? Should I let her pay some variation of HOA, property tax, mortgage, insurance, utilities?"
Absolute nonsense, at least under Texas law.
- 9yJason G.Pro MemberRental Property Investor · Long Island, NY · Member since 2015 · 434 posts · 495 votes
@Drew Shirley, don't forget your legal disclaimer. Those last two statements are pretty firm. You don't want @Alex Johnston relying on those statements on the off chance you are wrong. But then again you are the Texas real estate attorney, so I will defer to your expertise.
Originally posted by @Drew Shirley:
I'm not your lawyer and this is not legal advice, etc.
IF YOU STAY IN WASHINGTON, WATCH OUT, BRO.
A 2-second google search showed me that Washington state recognizes some sort of nonsense called , which means that if you and your girlfriend live together and split expenses, she may have a claim on all your property, even if it is 100% owned by you and even if you do not hold yourselves out as being married.
To avoid this, you will need to enter into a cohabitation agreement with your girlfriend, clearly setting out what is yours and what is hers (for example, all real estate now owned or later acquired).
I'm not licensed to practice law in Washington state. You need to find someone who is.
IF YOU MOVE TO TEXAS, things are a lot better. Texas is a community property state, which means that any property you acquire before marriage is your separate property. Your girlfriend wouldn't acquire anything by living with you, paying bills, etc.
Now, Texas does recognize common-law marriage, but honestly it is extremely rare. To have a common law marriage recognized by a Texas court, you have to (1) agree to be married, (2) live together as husband and wife, and (3) tell everyone ("hold yourselves out") you are married. Here's a good summary of Texas law on common law marriage.
Good luck.
I have such an agreement with my GF, for this very reason. But the reality is what you are referring to is a marriage like relationship, it depends if there was community property, whether you presented yourselves as a married couple despite not being married, etc.. It's not quite as cut and dry as having a girlfriend = she get's half. The length, nature of the relationship and whether you had shared bank accounts factor in, there is also whether your intentions were to get married or have a marriage like relationship. I keep all my assets separate for this very reason, and have a co-hab agreement to boot. She knew from the beginning I did not want marriage or kids, and that I didn't spend years in college and corporate building an IT career making 8 times what she does so she could get half after she partied it up in her twenties then met me...
The OP is well within his rights to protect what HE worked for. I know some of the left leaning people can't seem to understand that other peoples money is not yours...
- Investor · Seattle, WA · Member since 2014 · 58 posts · 15 votes9y
From personal experience: I currently live in my partner's house and pay half of almost everything, even though I get no equity from it. I see this as renting but don't have a lease and would question the stability of my relationship if my partner asked me to sign one... We moved from a house I owned and I did not have him sign a lease either. We were both really up front with each other and understood that each of our assets are our own. I hope you are able to find a compromise that works!
Relationship-wise, the fair thing is to split bills based on a percentage system. (Made up numbers), if you make 60% of the household income, you pay 60% of the household bills (and your GF pays 40%).
As a woman, I'm not touching the rest of this with a ten foot pole.
Originally posted by @Drew Shirley:
@Jason G. What you are saying is incorrect under Texas law. You cannot acquire an interest in real estate by paying part of the mortgage. All real estate transactions in Texas must be in writing to be enforceable. Stop giving bad advice.
@Alex Johnston don't listen to this guy. Don't listen to me, for that matter. Do some research or consult a Texas attorney for real.
Agreed. The only caveat would be a Common Law Marriage claim. I understand there would need to be additional claims established such as "holding themselves out as being married" . If that is the case, contributing to the payment would help solidify the claim
My long-term partner (20 years) has been living here for 17 years. We are still not married. There is no common law marriage here. He never paid rent of any kind to me. I'd been living here on my own for 5 years before I met him. When he first moved in, the house was in my name. From the start, we split all other expenses 50-50. At first we totaled all receipts and split that up. Later we just opened up joint checking accounts and credit card accounts, and each of us just fed that account in equal dollar amounts. Then everything was easy to split 50-50 without the hassle of adding up all the receipts. Clearly personal expenses were kept separate (e.g. I don't drink coffee, he didn't pay for feminine products). In summary, we kept three checking accounts between us: mine, his, ours. Each had associated credit cards.
Over the years we bought three rental properties together. We got an additional checking account and credit card for the rentals.
Our primary residence title is still only in my name, but we refinanced and he is now on the current mortgage loan for this one. But, our rental income pays all of our primary residence PITI.
In your case, for starting off, I think you should split all the day-to-day expenses and utilities 50-50 the way we do. In terms of 'rent' for her, I would agree with a previous poster who said above to agree on a flat rate that's under market. In terms of arriving at what that number should be: (1) take the PITI and divide that in half. That's the maximum possible it should be. (2) Consider the ITI (PITI with no principal). Cut that number in half. (3) Look around at what the market rate (without utilities) is for roommate situations (if she would live with someone in a different rental house but of similar quality). Compare those three numbers. If they are all within $100 of each other, have her agree to pay the lowest of these three as 'rent'. If there's a vast difference between the numbers, then see what you both agree is fair.
And as others have said, don't buy this property if you can't afford it entirely yourself. If you can't do that, you're not ready to buy yet.
- Investor · Henderson, NV · Member since 2017 · 37 posts · 39 votes9y
Don't ask her to pay the mortgage but she still must pay "rent." Find out what market rent is for the one part of the duplex and ask her to pay her half. Since she's making a similar salary to you I don't see any good reason to let her live there free. Living expenses should be split down the line. We do live in a supposedly egalitarian society so why be unfair to yourself financially when your partner is already a financial equal? All this talk about chivalry and letting your girlfriend living there free makes me a little queasy.
Personally I don't think you need a contract. If she agrees to the setup and reneges later, then you'll know she's not a good partner and what the next steps should be. I believe the law is on your side if ownership of the property is in question in Texas (don't take my word on that), but if you want to save the hassle should that circumstance come up, by all means write up a rental contract.
This is coming from a happily married man of 8 years who keeps separate finance accounts and still splits living expenses with his wife.
- Real Estate Agent · Carmel, CA · Member since 2015 · 193 posts · 128 votes9y
i out-earn my GF, but somewhat similar situation I guess...
i can afford the PITI by myself. we have a joint account for all home expenses, and I feed it 3/4 and she 1/4. crap like utilities, cable, lawn service and even a car (we own jointly) all get paid out of there.
for now it works for us.
Originally posted by @Account Closed
This is not going to end well.Just so he knows... I think the answer to the future question, if it doesn't end well, is something like:
"Depending on state of course, for a home titled in your own name as you own your sole property, typically I think she'll only be entitled to half the gains (or losses?) from the period of time that you were married, or deemed to be married by a judge. But ask an attorney or CPA or something."That in mind, I like the month to month lease idea. Rent a room (and actually designate one as hers). Or marry her and live happily ever after. That can be great, too.
Originally posted by @Sara K.:
As a woman, I'm not touching the rest of this with a ten foot pole.
How about this...
"Actually, my great aunt owns the house... she's in...uh Peru. Always travelling, you'll probably never meet her. Anyway, here's this thing... she demanded that since you've moved in we BOTH sign this month to month lease. I know right! Anyway...so if you could just sign here that'd be groovy. Umm, and here... also initial here. Grrreat. (whew)"
BUT DON'T FORGET TO CLEAN UP!...
(Day after they get married....)
"Well...bad news, good news. I just got a call from an attorney in Peru. Apparently my great aunt passed away a few weeks ago and left her only possession - this house - to us. We can go ahead and tear up that lease I guess."
Originally posted by @Alexander Felice:
I do this with my long term girlfriend
If you want 100% equity, you pay 100% PITI, that's what I do. You want the benefit then take the responsibility.
utility bills that are shared, are split 50/50.
I've been doing this with her for 4 years, we are 7 years in together and quite happy. I still don't know if I'll ever get married.
These are the kind of threads that get people into trouble!
- Brooklyn, NY · Member since 2017 · 39 posts · 13 votes9y
Good Job 1st and foremost getting some different views can be enlightneing 2nd having a plan and exit strategy. .They always change imperative to clarify your expectations is what any consultant business legal or relationship adviser that is worth anything would tell you will benefit you long term
Gotta get your sales game up is where you can improve once you can convince your girl you can convince anyone to rent or buy your next project hit me up Im looking to buy in WA area and do some investing where your moving
If it makes profit we can make it stronger.
- Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes9y
Interesting read!
- Indianapolis, IN · Member since 2017 · 6 posts · 4 votes9y
You stated that she still wants to rent. So rent to her. At least something needs to be signed saying that she will pay $X per month, it could be pretty informal and month-to-month. As for the other bills (groceries, utilities, etc) you could split 50/50, that worked out for my husband and I when we lived together before we were married. For that, I suggest Google Wallet, it was a lifesaver :)
- Frisco, TX · Member since 2017 · 201 posts · 95 votes9yI see no problem with charging her "rent" just as you would any room mate. She should pay it to you, not write a check to the mortgage company or any of the utilities, etc. I would suggest "rent" covers her share of all housing expenses. Not groceries. You two should split groceries or she can buy hers and you buy yours if you eat separately, like roommates do. (I understand some young people don't even cook these days) It really should not have anything to do with how much either of you make in relation to the other. Adjusting "rent" if her salary goes down could be perceived as "a different relationship" by a court.
Good luck. - 9yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
Now Ask her. If you dont have a meeting of the minds you have your answer.
- Investor · Bronx, NY · Member since 2015 · 52 posts · 22 votes9yGetting your lady to sign a lease agreement sounds like trouble. Having her sign a contract that says she will not pursue you for any past or future property you obtain, not hard. I would not let her pay any bill that gives her a say so in court. While living together I would give her expenses such as groceries and cable. If she cooks and cleans that all adds up. She pays less bills and has huge chance to save money, so I would not consider this as greed.
- 9yJeremy TaggartBusiness MemberReal Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votesAlex Johnston I just was in this situation with my girlfriend I just had her split the utilities with me and I paid the rest since my name was on the property. Well technically the tenants did lol.
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