Considerations for Communal Living

Owning your own home is part and parcel of the classic American Dream, but its a parcel many people struggle to afford. Whether youre a current student, fresh out of college, or striving to hold down multiple low-paying jobs while getting the rent in, living somewhere decent on a budget on your own can be a massive pain, not to mention the significant financial risk if something goes wrong. But theres an economy of scale to housing one two bedroom apartment is cheaper than two one-bedroom apartments, and a three bedroom apartment is even better. Or perhaps you want to seize that dream and get a home with eventual room to grow but you just cant guarantee youll be able to afford the mortgage.

One classic and increasingly popular solution is communal living. Whether four friends renting a house together during their college days, or apartment-mates in a two-bedroom place, or even a new homeowner filling those empty bedrooms, living in groups can make sense financially. Not only can you split the cost of a house, but you can also split chores and home maintenance a job that can take an average of 11.3 hours per week for a two adult household according to the Bureau of Labor Statistics. While adding adults will increase some of that load, most of the more time-consuming chores remain fixed, and the more people you can split them among, the better. If you have an unusual situation, such as a productive and complicated home garden, that number can easily increase. But for all the benefits, there are significant considerations to keep in mind before and while moving in with other people.

Whos On the Hook?

Most people who have tried communal living will agree that its generally a good idea (and required by some landlords) that you have only a single person, or married couple, on the lease unless youre all renting the rooms separately from a different landlord. You may be thinking, wait a minute, doesn’t that leave one person on the hook and at risk if things go poorly? Yes and no, depending on how the rental contract is worded. Establish a system where everyone else pays rent, with some possibly paying more for the bigger rooms. Consider utilities… If one person is on the lease, perhaps others can be on the utilities, spreading out the risk among roommates. Get a contract in writing that stipulates who is responsible for what, and most importantly the consequences for non-compliance. If Joe loses his job and can’t afford a month’s rent, what are the consequences? How does his share get covered? If Maria moves out with no notice, what options do the others have to fill that vacancy? These are the sort of things you want to discuss before moving in. But having one trusted person on the lease gives oversight to the process and ensures a single point of contact in negotiating with the landlord.

Buying Versus Renting

Buying is a lot riskier since you […]

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