Flatting - A Payment Model
I’ve been flatting in the same flat for six years now, some flatmates come and go and others stay the same. During this time, we have been trying to find a good model for figuring out how much to charge each flatmate.
We started with a basic model - everyone pays the same. This was all well and good as all of the rooms were a fairly similar size. Then we started to have issues with couples sharing rooms and what happens when you want to rent out that small room? Is a system where what people pay is simply based on intuition good enough?
I didn’t think it was - so I devised a new model. It still has it’s limitations but is fairly sound, seems to be fair, is not inordinately complex, and corresponds well with what would seem intuitively right.
The model centers around the concept that when you rent you are in effect paying for the space you use. In the model all space - be it your bedroom, the kitchen or the toilet is treated as equal. It’s the amount of space that an area uses that counts.
Lets give a simple example of the system at work. Andy, Bob, and Charlotte all live in a nice new house and all have the same sized bedrooms - one each! If the rent is $300, they will all end up paying $100 each - it’s fair! But why? The facts:
- The total rent of the house is $300 per week.
- The total floor area (or space) in the house is 120 square meters
- Andy’s bedroom has a floor area of 20 square meters
- Bob’s bedroom has a floor area of 20 square meters
- Charlotte’s bedroom has a floor area of 20 square meters
- The cost per sq m is 300⁄120 = $2.5 per sq m
- 60 sq m of the house is bedrooms, 60 sq m is general living space.
- Each flatmate will pay their share of the general living space, this accounts to (60⁄3)*2.5 = $50
- Each flatmate will pay for the exclusive use of their own room, this is 20 * 2.5 = $50
- Therefore the total per flatmate is $50 + $50 = $100 per week.
Seems simple enough right? Lets show a slightly more complicated example: The facts:
- Andy, Bob, and Charlotte move into a new flat with Dave and Emma.
- The total rent is $520.
- The floor area of the house is 180 sq m
- Andy and Emma are a couple sharing one room, it’s pretty big at 30 sq m
- Bob has a little poky room at only 8 sq m
- Charlotte and Dave are also a couple sharing a room, it’s also quite large at 20 sq m.
- Dave works from home, so has an office which is all his space at 16 sq m.
- The cost per sq m is 520⁄180 = $2.88
- There is 180 - (30 + 8 + 20 + 16) = 106 sq m of general living space.
- Each flatmate will pay for their share of the general living space at (106⁄5)*2.88 = $61.30
- Andy and Emma are going to pay (30⁄2)*$2.88 = $43.20 each for their room. They will pay $61.30 + $43.30 = $104.60 each per week.
- Bob is going to pay 8 * $2.88 = $23.00 for his room. He will pay $23.00 + $61.30 = $84.30 per week.
- Charlotte and Dave are going to pay (20⁄2) * $2.88 = $28.90 each for their room. Charlotte will pay $61.30 + $28.90 = $90.20 per week.
- Dave has an office, this will cost him 16 * $2.88 = $46.10. He will pay $61.30 + $28.90 + $46.10 = $136.30 per week.
- This adds back up to $104.60 + $104.60 + $84.30 + $90.20 + $136.30 = $520.
Hopefully that all made sense. Would you agree that this seems fair? The system does have some limitations, most of these can be resolved by adding a weighting to the value of each square m, but this adds an additional level of complexity.
Some of the limitations and other considerations are:
- Individual rooms may be better decorated, be quieter, better insulated, get more morning sunlight
- If the property has a garden or garage this system does not be default add these into the calculation, however the system tends to provide a balance towards the social areas of the house, and therefore not including external areas in the calculation for general living space seems to counteract this.
- It does not account for human actions - if Dave always does all the cleaning, shopping, and prepares the meals - maybe he should be paying less?
- It doesn’t account for house guests. But here you have a number of options - you can choose not to charge them, or if they don’t have there own space, maybe add them into the ratio of usage for general living space, or just get them to pay for dinner!
- The system makes the assumption that all flatmates live in the flat an about equal amount of time. While you might argue that absentee flatmates are not using the general living space and therefore shouldn’t pay for it, there is an opportunity cost that the other flatmates could choose to rent the space to someone who is present.
- In some flats the flat is rented out per room - the flatmates don’t really get a say - but the landlord could still use this model to provide a fair charging system.
What do you think? What do you use for your own flat? Do you think this model is fair? Too complicated? Want to try it for yourself? I have included a spreadsheet for good measure - Rent Calculator