question:- I'm mortgage free. should my girlfriend pay me rent ?

silvercar

If she didn't move in with you, I guess you wouldn't get a lodger as financially you wouldn't need to. So by charging her rent you are profitting out of her.

If you would get a lodger then maybe you can justify charging her rent, but if any rent she pays you is money you wouldn't otherwise get, then you are profitting out of the relationship. Wait till an arguement leads to accusations that you don't love her, only her money.

jo6526_2

justwondering25 wrote: »

Im glad it worked out for you both , better than going into a landlords pocket .

Thank you. It also means I can joke with my partner i,e yesterday we ran out of dishwasher tablets and I said im going to report this to my landlord

Sorry I just realised im 25 pages into this discussion. Have you come to an agreement on the rent?

justwondering25

Hi yes we did , i've edit my first post on page 1 and added a bit more detail , have a look , we have come to a good solution.

jo6526_2

justwondering25 wrote: »

Hi yes we did , i've edit my first post on page 1 and added a bit more detail , have a look , we have come to a good solution.

Just read the update! Happy its worked out

tallgirld

I dont think she should pay any rent but she should pay half of all the bills. Even if you did still have an outstanding balance on your mortgage I would still say she shouldn't pay any rent. The bottom line is you shouldn't make any money off your girlfriend but it shouldn't cost you any extra either.

That's my two pennies worth for the day :-)

loolar

u have an advanage,over many working class people.to pay off your morage,if it were me ,id say, let us both save 200 pound per month ,to enjoy life eg weekends away ,hoildays,,etc seems you are looking at this woman ,as a logder,,to pay rent ,,this could well be your wife in time,,,,what price would she put on ,,being your wife,,and maybe mother to to kids ???? priceless i think ....but i do not think ...you see her ,as this at the moment,,,just a live in lodger and some ????

dave2

OK, the rent/mortgage interest you are not paying on the house is effectively your income. It is exactly the same as if you had put the money into a savings account and the interest income happened to equal the mortgage interest. This is simple fact and there is no logical dispute. I should point out that the capital gains/losses you make are also part of this, i.e. your income. Putting that behind us...


The first thing to establish is how you guys split your finances. This is the real issue at hand and once decided the resolution will simply follow on. I see three common approaches:


a) Some couples only have a joint account for bills and household expenditure, to which they both pay in equal amounts. The remainder of each individual's income stays in their own bank account to spend as they choose. Objectively this is the fairest approach.

In this scenario, what should happen is:
i - she pays into the joint account half of the interest from an interest-only mortgage.
ii - you reduce the amount you pay into the joint account by that amount.
> This is not the same as her paying you rent: that implies you are profiting from the situation and that is NOT the case, all it does is recognise that you made an investment that both of you are benefiting from. In fact you are still losing out, because you could instead have obtained a commercial rent from a lodger (arguably you should really be splitting the difference between a rent and the interest but lets not go there).



b) Some couples primarily use a joint account and each gets more or less half the spare income to spend on themselves. What's mine is yours and what's yours is mine, is taken quite literally. Objectively this is unfair, but if both of you now are (honestly!) only interested in keeping each other happy then this is clearly the best approach to that.

In this case a rent, notional or otherwise, obviously makes no sense.



c) The third approach is in the middle of the above. It is the same as a) except that the amount each person pays into the joint account is proportional to their income. So if bills are say £10k while one of you makes £30k and the other £20k, the first person puts in 10*(30/50)= £6k and the second 10*(20/50)= £4k. Note how this keeps the "personal income" fraction the same, i.e. 30/50 = 24/(16+24) = 60%.

This is very helpful. For example, you said you were doing very well so let's assume you are making 60% of the combined income and therefore she is making the 40%. If the time comes that she falls pregnant and you both decide that she should stop working for a time, as a couple you can recognise that she has sacrificed income by you paying her 40% of the "personal income" i.e. (30-10)*40%=£8k. This leaves you with 30-10-8= £12k and oh look we're back to that 60/40.

Under this scenario you would follow i & ii per a) except the proportion would be 40% instead of half. But remember to include this "mortgage interest income" in with your income in determining the %'s!

You can of course substitute any proportion that you wish. Maybe you think you should only keep half of the extra you earn over her, so in the scenario above you'd go for 55/45.

While this is neither objectively the fairest like a) nor is it putting the couple above the individual like b), it is a good combination of the two and is very flexible. This is particularly relevant since you're self-employed and your business is changing - you'll be sharing your good times and cushioning your bad times. Supporting each other in the short term whilst in the long term it should work out really quite fair. Even if you end up doing fabulously and paying in much more, well that's OK because in a way she took on some of the risk by agreeing to pay in more should the business not do so well.


d) OK I fibbed. There is a 4th common approach. This is all too common, people do not really agree how to split the finances and so there is no principle, no guiding rule to follow. Everything is done ad-hoc and each time there is opportunity for argument and bad feelings.


The solution now edited into the first point does not make that much sense to me. For starters you say she is paying half the rent in, but then she gets half of that back so she is only really paying in 1/4 of the rent.

Moneysavingdimwit

Thought 1. Be careful what you charge for. If not, intuition tells me that you might well find yourself losing out in the long run.

Thought 2. Starting from the (admitedly questionable) premis that the best things in life are free, carefully work out how much to charge your girlfriend. Then let her decide what to do next.

Mrs_OBBM

I'm a bit of a late-comer to this thread so probably what I'm about to say has already been said. I think your business brain is getting the better of you. You have to ask yourself - why do I want my girlfriend to move in with me? Is it because you love her and want to be with her every day instead of just at weekends? Remember, she is making a sacrifce in giving up her independance to move in with you and share her life with you. Yes - you should sort out how the day-to-day finances are split between you and yes, you should sort out savings for the future. Many relationships have foundered because these basics have not been thought through. However, the fact that you have 'worked hard to pay off your mortgage' was your decision, not your girlfriend's. Why should she (retrospecively) be penalised for a decision that you made without her knowledge or consent. Will you be making a contribution to all the rent that she has paid for her accommodation in the past? Somehow, I doubt it. So I ask again - why do you want your girlfriend to move in with you? Is it because you love her and want to be with her every day, or is it because you see her as a source of income?

pb8770

:jWith regards to charging her rent, me personally I wouldn't, at the end of the day it is your house, draw up a pre nup if you are unsure of your future with her so she is not entitled to your assets, as you will get rewards as the value of the house goes up. If you are both working then there should be a kitty, both your wages go into it, from the kitty you pay household bills etc. If you love her as much as you say then what is the problem, what would happen if you both want to get married, the money she was paying you could have been put away to the cost of the wedding as she would not be able to put in as much as you due to her paying you. When you both start out as a couple everythin should be split 50/50.