I need some advice from any and all who have an opinion on the matter. Even better if you've been through the same situation. Im considering moving to Texas from Washington and purchasing my first duplex and house hacking. I graduate college in near future and I'm a veteran, so I plan to use my VA loan to finance the purchase. I have a long-time girlfriend that I wish to move with and live with. I'm perfectly happy with my relationship but I'm absolutely NOT considering marriage at this time, or anytime within the next 5 years. I want this property to be 100% my own. How would you suggest fairly splitting the bills with a partner who is also technically a roommate? We both make about the same salary annually. 50/50 everything? Should I let her pay some variation of HOA, property tax, mortgage, insurance, utilities? What's fair and reasonable, if my goal is retaining 100% equity and ownership of this first property?

@Alex JohnstonThis is not going to end well.

Personally, I think these peoples advice above is terrible. You seriously expect your girlfriend to sign a lease!? If things go bad in the relationship, why the heck would you want a lease in place? So you're broken up and forcing her to pay you still? I think that is awkward. Make sure the numbers work with you just living there and her not paying you anything. I think showing your hand is not a bad thing here. My conversation would be something like this "Hey (your girlfriends name here), I'm really excited for us to move in together to this new duplex I got. Although I technically own it, I still have to pay the mortgage, the taxes, insurance, and when anything needs to be repaired, it will ultimately fall on me, I think it would be fair for you to pay me $X a month (some amount slightly below market) and we should split utilities. Does that sound fair?"

My first piece of advice is that you should be asking your girlfriend this question, not a bunch of strangers on the internet. That said, here's how I have structured this in my own life. (I've been in this situation twice and handled it differently each time, depending on everybody's needs and thought processes at the time. The first time, his house remained 100% his. I agreed before moving in that I would have no equity in the property nor any claim to it. With that, I refused to pay one dime towards his mortgage nor did I pay anything towards utilities. Instead, I paid for 100% of all other "joint" expenses, such as groceries, car insurance (but not his car payment), dining out, vacations, etc. This came out to roughly 50/50 most of the time and we did not sweat the details. We actually crafted our own "pre-nup" for this that we both signed and agreed to. When we split up many years later, it was a pretty easy process due to going into the scenario with eyes wide open. Expectations were set perfectly on both parts way in advance. The second time, we agreed that I would pay a specific monthly amount which would go towards "my" portion of utilities and groceries. I agreed that I would have no equity in the house. All other expenses remain separate - car insurance, health care, clothing, etc. Anything that needed to be purchased for the house (furniture, repairs, etc) were to be his expense. We take turns paying for eating out and anything else we do together. Again, I signed a document agreeing that I would have no equity in the house. (It was my idea both times, by the way). Sit down, talk things through with your girlfriend BEFORE you move in together. It's not romantic and it's not fun and there may be some hurt feelings on both sides, but in my opinion, hammering out these kinds of things is absolutely crucial before you make that kind of commitment. And if you can't resolve this topic, then the topic actually ends up taking care of itself. You will both find out where your limits are if/when ultimatums get issued.

In the old days people used to get married first and then move in together...and stay together for life. Life was way less complicated back then.

If you 2 can agree,, I would have her sign a month to month roommate lease agreement. This would permit you to take expenses on the unit as 50% of that unit would be rental and tax deductions would be helpful.. You could charge her whatever you want but any rent you would also claim as income.. I would factor in all the expenses you listed on the property and would think 35 to 40 % of that cost would be fair as her portion. Keep all utilities, cable, HOA, in your name only and title of property. Either you put a ring on this girls finger.. or she'll end up ringing your neck down the road.. There is no fair way of splitting expenses,, your gaining equity on property,,, and have tax write off's she won't.. so keep that in mind.

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 committed intimate relationships, 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.

@Alex Johnston From my experience, and having a healthy, happy, and fiscally-respectful relationship, I can say that doing the total opposite of what has been suggested to you here is what worked for me. What @Charles said is spot-on. I would never. EVER. ask my woman sign a lease or "pay me rent," that's probably the mindset behind why 50% of marriages/relationships fail and why money is such an issue in so many marriages. What worked for me is to absolutely not make it about the house, or any bills specifically at all. The fact is, you guys share a life together. That life costs you $X per month. What would you both like her (and your!) contribution to be toward your shared life costs? That's the end of it. As soon as you make it about specific things, you're headed for trouble, and it'll often cause tension. Instead, figure out what your life together costs you both, and figure out what both of your respective contributions to that life together should be. If your life together costs you $2000/month, maybe she pays for 50% of that - but she's not paying for anything specific, it's simply her contribution toward your life together, and you do the same. As soon as you make it about specific things, I think that's a recipe for disaster. So, don't split bills, don't split HOA, don't split any item in particular - simply total up how much your life together costs, and you both contribute toward that. The house is in your name, there's no more discussion to be had about who's responsible for those bills. And for the love of god, if you care at all about the long-term health of your relationship with this person, do not have her sign a lease. You're not married, she probably has no claim to anything anyway, so quit worrying about it. Once you get married, there's no sense worrying either since you don't have a choice about it! :) Cheers mate, good luck to you, hope a little different perspective helped.

@Alex Johnston Are you leasing her the other side of the duplex or something? If y'all aren't ready to just figure this out together, moving in together is probably going to end up being a bad choice.

Hey, I am just a married old guy. But here is my two cents. IF she is financially able, ie if she was a student, or a single mom I would have a different answer. But generally if she was living on her ow, she would have rent of her own to pay. Say market rent is $1,500 (no idea what it would be in your area). I might ask for $1,000/month to help defray living expenses and possibly utilities, and then I would likely split groceries, or what ever. My point is she shouldnt get off completely free on rent, and you shouldnt be making money on a GF. A nice well below market sum of cash each month and cal it a day, and you both win. Honestly, I would think twice about moving in with someone I wasnt married to unless you are all but certain you are getting married. Because I can tell you from experience, getting out of a live in situation is almost always a bad thing.

How to split bills with a girlfriend if you own 100% equity

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

9y

@Alex Johnston I lived with my now wife for five years before getting married. We split every expense in half while renting, then when purchasing we split all the expenses in half. We also split ownership in half.

Since it is a duplex, the tenant will pay rent which would go towards mortgage and HOA. So that complicates things because you would need to subtract that out before splitting expenses.

I would work with her on an agreed amount to pay each month. Let's say a decent apartment is $800 in your market and $100 utilities, the total would be $900, so she pays $450 each month. Regardless of what your duplex costs, her costs should be based on half of average housing price. Why? Because she would be perfectly happy living in an apartment with you and renting. She shouldn't subsidize or profit from your duplex.

I always tell my daughter when she is sharing a cookie to break it in half and give the the bigger piece to your friend. The point is that when breaking cookies, it never exactly even, but cookies are easier to get than friends.

2 Reply

Alex Johnston

OP

Seattle, WA · Member since 2017 · 8 posts · 10 votes

9y

We seem to have quite the popular topic here! This post has provided me with a ton of great feedback and things to consider.Thank you all for sharing some of your thoughts and unique perspectives!

0 Reply

Jonathan KlemmBusiness Member

Moderator

Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes

9y

Make sure the numbers work with your salary alone and have her pay a slightly discounted rent and be done with it. It's not that complicated. It allows you a little extra money towards your mortgage and her a little more money to save.

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1 Reply

Duc Ta

Investor · Village Of Indian Springs, OH · Member since 2017 · 23 posts · 3 votes

9y

You live in a duplex. Rent out the other unit and use that to pay rent (I think both unit has 2 beds and 1 bath). For her, let her pay the groceries and part of the utilities. That's what I did.

0 Reply

Derek Luttrell

Chicago, IL · Member since 2017 · 231 posts · 124 votes

9y

Two months ago I bought a 3/2 all in my name. I'm 25, girlfriend is 24, dating 4 years. We're in the master bedroom, and we have roommates in the other two rooms paying me market rent. After their rent, there's about $400 left to pay that my girlfriend and I split evenly. Utilities are split evenly among all 4 roommates. In her eyes, she loves it because before this we were each paying $1000/month to rent in downtown Chicago. She is not an entitled or selfish person, so she would also never feel right just living for free after I made the down payment. She is now expediting her savings, and hopefully the next place we move into can be a property that's entirely in her name.

2 Reply

Aaron K.

Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes

9y

If you want to be the most fair, split everything except the mortgage payment 50/50, then let her pay half of the interest for the mortgage that way she would still be paying for the housing while not paying for equity that she isn't getting. If your mortgage is $1000 per month and $600 is interest she would pay $300 and you $700 and her share would go down over time as you paid down the loan.

1 Reply

Liwen Gu

Real Estate Broker · Salem, OR · Member since 2017 · 101 posts · 43 votes

9y

I hope she doesn't see this forum thread lol. I think you should bring up the topic of moving in together and let her know that you want to buy a home. Maybe mention to her how much the mortgage payment and expenses will be and see if she will offer to help pay a portion of it. I think it's rather awkward to ask your gf to pay a certain amount and making it into too much of a business transaction...

0 Reply

Michelle Elsaid

Real Estate Agent · Orlando, FL · Member since 2015 · 127 posts · 39 votes

9y

I'm not sure why this would be handled any differently than a roommate. With my roomate, she signed a six month lease with utilities included, at market rent for the room. You could change this to month-to-month since she is a partner, and include or exclude utilities. The lease will cover you in case of a disagreement or separation the same it would any other tenant. But, if you would be worried about a bad separation that would be a whole other topic for the relationship board that i'm not sure exists on BP :-)

By no means should the rent for the room have anything to do with your mortgage payment (taxes, insurance, etc.) or share a part of the expenses. It should be market rent or slightly under if you wanted.

1 Reply

Michelle Elsaid

Real Estate Agent · Orlando, FL · Member since 2015 · 127 posts · 39 votes

9y

Personally I don't agree with exchanging a room for groceries or other expenses. That seems like it could get complicated. Why not just agree on a fair number for rent?

1 Reply

Joseph M.

Saint Paul, MN · Member since 2015 · 31 posts · 15 votes

9y

I see it has been mentioned but be very careful around the family law implications here. Some keywords to search "Palimony" (not kidding) "non-marital cohabitation" etc. some States treat long term cohabitation like marriage and split things per family law. Not good. Other states have feuding branches, where the legislature will pass something to control the courts from giving too much to a cohabitor or vice versa. It's very state specific. You'll want to do your homework on it.

0 Reply

David S.

Investor · Bay Area, CA · Member since 2014 · 165 posts · 45 votes

9y

You could do this:

You buy the property in your name;
You and your girlfriend, by looking at comps, agree on what the market rent for the property would be;
You both pay 50% (or other agreed split) of that agreed rental value as monthly rent. That goes towards covering the cost of ownership - mortgage payments, property taxes, HOA, repairs and whatever else a landlord in that market is responsible for. You as the landlord would be responsible for any shortfall against those "ownership" expenses. Any excess is the return on your investment plus you get all the equity appreciation;
I am sure you and your girlfriend can figure out how to divvy up the other shared living expenses like groceries, cable, phone, hair shampoo, etc.

The important thing is you both talk it all out and you can then document into some sort of formal agreement it if you want.

1 Reply

William S.

Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes

9y

@Alex Johnston

Apologies. I only have a moment and skimmed the thread, so this may have been brought up already...

What did you do before when you rented a place together? I would assume if rent was $1,000/m each of you paid $500/m. You both are using 50% of the building.

If market rent on the property is $1,000/m, then she pays $500/m.

Don't let the emotion side of things get in the way. This is a financial decision.

1 Reply

David Zheng

Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes

9y

I think as long as you guys aren't married and shes not on the loan or title, just ask her informally to split everything with you minus the mortgage/taxes. I would split utilities and insurance though still.

0 Reply

Tony Xu

Investor · NY · Member since 2017 · 59 posts · 21 votes

9y

I will chime in here since I'm currently in this situation but on the other side, it's my girlfriend's house.

So I live in SF where the housing prices are insane, and she got a great deal on a government sponsored condo. So now that we live together, I pay for her mortgage, while she pays for all the utilities plus HoA, groceries, etc. She ends up paying a little bit less but its not a huge deal. I am paying less than if I had to rent anywhere else and she saves money every month because I pay for her mortgage.

I also think in my case its fine that I pay a bit more because we try to split expenses up proportionally to our incomes.

0 Reply

Joe Arida

Rental Property Investor · Fitchburg, WI · Member since 2016 · 91 posts · 60 votes

9y

Well, everyone's relationship is different, but the plan my girlfriend and I have is to live together in one unit, rent out the other, and she put $X per month toward the bills. I own the property. Now, due to my lack of experience, I didn't think about the tax write offs of having some kind of roommate lease in place. I do know that this wouldn't be any kind of issue for either of us, so I plan to talk to a professional to figure out if that would be a good option. I think really it just comes down to what's right for you and your situation. open dialogue is almost always the best. Talk with her about the pros and cons of the different options, and get her opinion. Do be cognizant of your local laws though, the "committed intimate relationship" for example... That said, I think easiest to do is just have her pay groceries and internet and maybe if you share a phone bill, idk., things like that. You could even set up a separate account to pay the mortgage out of with direct deposit right to it, that way there is no questions you paid fully.

0 Reply

Jerel Ehlert

Attorney · Austin, TX · Member since 2014 · 890 posts · 759 votes

9y

Talk to a family law attorney to get a cohabitation agreement. This will prevent claims of "common law marriage" and her taking half in a split up.

0 Reply

Mike Watson

Investor · Provo, UT · Member since 2017 · 97 posts · 50 votes

9y

No offense brother, but I'd find a woman that had similar goals and aspirations as yours.....and then I'd marry her. She doesn't want anything to do with real estate for now and you want to be an investor. HUGE difference is goals, desires, etc.

Perhaps BP can start a "singles" forum here on site. Instead of "farmers only" it could be investors only. Individuals could list themselves as single family, fixer uppers, need a light remodel, cash flowing, upside down etc. How fun would that be?

4 Reply

Christine Kankowski

Real Estate Broker · Temecula, CA · Member since 2014 · 994 posts · 783 votes

9y

Sign a lease at half the fair market value of the rent (or whatever rent you both agree is fair) You share utilities, cable, internet, cleaning, groceries, cooking.

You alone pay for property taxes, HOA, repairs and insurance., Since its your place, you will be gaining equity and tax deductions, but you also are liable for repairs and insurance like any landlord. SHe may want to get renters insurance for her personal items.

I would definitely make a month to month lease agreement with her

1 Reply

Account Closed

Flipper · Pittsburgh, PA · Member since 2017 · 218 posts · 345 votes

9y

@Alex Johnston

Good luck keeping this as uncomplicated as you believe is possible. You're going to need it. And don't get her pregnant.

0 Reply

Ben Zimmerman

Rental Property Investor · Raleigh, NC · Member since 2016 · 396 posts · 995 votes

9y

A lease is way too formal for this situation, and causes other problems. If you break up are you going to still enforce the lease? If she doesn't pay rent are you going to evict her? Additionally this creates a system of double taxation as her earnings are taxed, and she uses those earnings to pay rent which is income for you...also taxed.

Instead if you really want / need her to contribute financially, I would suggest having her buy the groceries, or put a few of the utilities in her name. It feels less formal to her if she is paying for utilities, than if she is paying rent and would likely be more willing to do that, and the money is no longer treated as income for you that is taxable.

1 Reply

Jennifer Preddy EgbertPro Member

Real Estate Agent · Boulder, CO · Member since 2017 · 39 posts · 28 votes

9y

@Alex Johnston Cohabitation Agreement. They're great. You can lay out all your assets up front and who owns what. In it, you can define an exit agreement. Suze Orman has a great one on her website.

0 Reply

Trevor Lohman

Investor · Redlands, CA · Member since 2013 · 177 posts · 76 votes

9y

Best. Thread. Ever.

0 Reply

Remone R.

Auburn, WA · Member since 2017 · 305 posts · 88 votes

9y

Alex Johnston just some advice from someone who also lives in Washington state and engaged currently with real estate. Brandon turner said in his book rental property investing, how if your significant other doesn't have the same goals as you it could be troublesome down the road. So it doesn't mean your relationship won't last but if she's not willing to either help you with your properties and/or not complain when you have to devote time to it and less to her then your relationship will have some real rough times. My fiancée really got frustrated when tenant issues became some time consuming that she didn't want anything to do with it. But we sat and talked about it and I expressed my passion for it and the need for her support whether physically or emotionally. Now she listens to more BP podcasts than me. Most people want to stay away from owning property because they're not educated on it or know the benefits. As the man and the one who wants to invest in RE you should show her, you never know she may like it. Side note: we do split our household bills, and the property income pays the mortgage and utilities and t's worked so far. If I lose it all to her(god forbid) I can always get it back with the knowledge I've gained. Just my advice

1 Reply

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

9y

Originally posted by @Joe Arida:

Well, everyone's relationship is different, but the plan my girlfriend and I have is to live together in one unit, rent out the other, and she put $X per month toward the bills. I own the property.

Now, due to my lack of experience, I didn't think about the tax write offs of having some kind of roommate lease in place. I do know that this wouldn't be any kind of issue for either of us, so I plan to talk to a professional to figure out if that would be a good option.

I think really it just comes down to what's right for you and your situation. open dialogue is almost always the best. Talk with her about the pros and cons of the different options, and get her opinion. Do be cognizant of your local laws though, the "committed intimate relationship" for example...

That said, I think easiest to do is just have her pay groceries and internet and maybe if you share a phone bill, idk., things like that.

You could even set up a separate account to pay the mortgage out of with direct deposit right to it, that way there is no questions you paid fully.

What tax write offs do you expect for having a roommate lease? You may have a little more depreciation you can claim, but you also have to claim all their rent as income. I would run some numbers before assuming this the best option.

0 Reply

Deanna McCormick

Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes

9y

Post should have been listed as

HOW to SPLIT BILLS with A PARTNER if you own 100% of Equity.. ??

Answer is : With a CONTRACT..

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How to split bills with a girlfriend if you own 100% equity

How to split bills with a girlfriend if you own 100% equity

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