The Multi-Purpose Home

Today in Dear Splitwise, we talk about a unique housing situation in which one occupant makes considerably more than the other, and how rent should be handled when in that situation.

Dear Splitwise,

I have been utterly in love with a specific home design for nearly half of my life. As I’ve grown older, I’ve come to realize that this particular home is far bigger (and more expensive) than I could manage all by myself. Then an idea struck me- why not make it a two family home?! My best friend and I see eye to eye on just about everything from chore duties to child rearing, every core value that makes or breaks cohabitation.

As for the house- it’s definitely a very large (about 10k of usable space) home! The house will actually contain 3-4 businesses (her clothing line and makeup studio, my dance studio and fortune telling) which would eliminate the need to lease those spaces elsewhere. We intend to rent certain areas of it for special occasions like weddings and parties. We also decided to take a bigger hit on the mortgage to incorporate green building techniques like solar shingles, grey water, and geothermal/radiant heating to dramatically cut utility bills. Depending on our ability to get certain permits, we may be able to completely eliminate some of the bills and produce income instead. 

We could definitely afford it together, and your Rent Calculator has helped me to get a slightly better picture of how we should split the “rent” of a mortgage. But before we set it in stone, I have a concern that I haven’t clued her in on yet- my income is (currently) considerably larger than hers. We both believe in fairness, but possess a certain level of pride about carrying our own weight. I feel that it would be unfair for her to pay a portion of the mortgage, plus the other expenses of a home, that is disproportionately harder for her to meet and easier for myself. What do you do when there’s a serious difference in income?


Want to Pay More

Hey Want to,

Your dream house sounds amazing! The description of the amount of space in your floor plan is to die for. I have a tiny 1300sq, 3 bedroom cape – wanna trade? I usually suggest to people that they not get into an arrangement where one person pays less because they make less, only because it usually ends on an ugly note. One side may begin to feel taken advantage of after awhile; or the person that’s getting the break starts to feel like they aren’t paying their fair share, and issues naturally arise. I think you need to step back and really think hard about how you’d feel in this situation after 5 years. If she’s paying $500 less a month than our rent calculator shows, then that’s $30,000 you’re possibly losing out on.

Thankfully your situation sounds like you have a little more wiggle room. It’s not everyday you can have a retail store within the walls of your own home (I’m super jealous of the commute you’ll have). I’d think about working out a deal based on her stores profitability. Let her pay less now, and work out an agreement where she’ll start paying more when her store is constantly reaching a predesignated profit margin that you both have agreed on.

I’d also think about other things that can be done around the house that your friend could do to make up for the rent you’re not charging her. You mentioned having kids, why not have her agree to take your child/children once or twice a week so you can get some time for yourself? It costs me $100 for a sitter every time I go out (before dinner), and I would gladly knock some money off rent if I knew I had a live in sitter that I trusted. Cleaning can also be something that can make up for loss of rental funds. Hate doing dishes? Have her agree to do them a few times a week.

As long as you both go into the living situation with a solid plan, then you’ll be alright. She won’t ever feel like she’s not pulling her own weight and you won’t feel like you’re being taken advantage of. It’s a win-win situation.


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