Not Married housing expense fairness

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MTMOriver
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Not Married housing expense fairness

Post by MTMOriver »

Currently my partner and I maintain separate households. I’m a widower with 2 children and she is divorced with 2 children. Family dynamics just haven’t worked out for living together but we both foresee living together in the future. Our assets are separate and will remain so. Her home is owned, no mortgage, and is roughly 3x to 4x the value of mine in a “gated” community. My home has a low interest 2.6 mortgage with 25 years left and no incentive to pay down. We will likely live in her home and I will rent mine out after children are out of the house in the next 5 years. I plan on retiring in 3 years and she will likely have at least 10 to 15 more years of working. At some point she will likely sell and we would move into my house. We live in a HCOL area and I have no intention in selling in hope that I can keep a property in the area for my children. She has housing in the same town so she will inherit for living arrangements so she’s not worried about living arrangements upon my demise.

What should be the reasonable expectation for each to contribute to the home upkeep. Should a portion of taxes, HOA, and home maintenance and insurance be born by the person who does not own the asset?

Thanks for any advice.
chassis
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Re: Not Married housing expense fairness

Post by chassis »

MTMOriver wrote: Mon Jun 10, 2024 11:03 am Currently my partner and I maintain separate households. I’m a widower with 2 children and she is divorced with 2 children. Family dynamics just haven’t worked out for living together but we both foresee living together in the future. Our assets are separate and will remain so. Her home is owned, no mortgage, and is roughly 3x to 4x the value of mine in a “gated” community. My home has a low interest 2.6 mortgage with 25 years left and no incentive to pay down. We will likely live in her home and I will rent mine out after children are out of the house in the next 5 years. I plan on retiring in 3 years and she will likely have at least 10 to 15 more years of working. At some point she will likely sell and we would move into my house. We live in a HCOL area and I have no intention in selling in hope that I can keep a property in the area for my children. She has housing in the same town so she will inherit for living arrangements so she’s not worried about living arrangements upon my demise.

What should be the reasonable expectation for each to contribute to the home upkeep. Should a portion of taxes, HOA, and home maintenance and insurance be born by the person who does not own the asset?

Thanks for any advice.
Lots of future hypotheticals in your scenario(s).

Start with 50/50 split. Does that sound good?
stan1
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Re: Not Married housing expense fairness

Post by stan1 »

Now? With what you describe entirely separate. Seems like my/theirs boundary is very clear cut.
In five years when you think you might move in to her house wait and see what happens. One of your assumptions is likely to prove wrong.

If needed, and she has more income than you she pays for your share of vacations or entertainment.
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celia
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Re: Not Married housing expense fairness

Post by celia »

As long as each of you still own a house, pay for your own house expenses regardless of where you each live.

There's not enough info provided (like income sources, SS, ages) to say much more.
sailaway
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Re: Not Married housing expense fairness

Post by sailaway »

Fair is in the eye of the beholder. You are just going to have to work that out for yourselves when the time comes.

When my partner moved in, they didn't contribute to housing at all. They started paying for all the groceries, the joint car insurance and gifting me the funds for a Roth IRA. I had nothing whatsoever to do with the house that they rented out. Some would say our arrangement wasn't fair because he they earned quite a bit more than me, but I was happy with it because I was better off than I had been on my own.
barnaclebob
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Re: Not Married housing expense fairness

Post by barnaclebob »

I personally would be fine with a 50/50 split of the household expenses like bills/food/nominal upkeep. Moderate/Major upkeep, taxes, and possibly HOA is on the owner of the house. I'd also be fine with not charging rent. But if my partner felt strongly about it, I'd have no problem paying a nominal rent to offset the more significant upkeep. I probably wouldn't want to pay market rates for rent however if its even possible to determine that in your case.

But every relationship is different and there may be more non/indirect financial contributions. For example I can fix a lot of things. Whats it worth that you don't have to worry about calling a plumber to replace a toilet flapper or garbage disposal?

Then there's also the factor of "what would we each be doing if we weren't in a relationship". The more your relationship causes additional expense to the other person, the more you should contribute. At the same time you shouldn't have to pay more than you are comfortable with if they want to live in a bigger house than you would otherwise choose.
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HueyLD
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Re: Not Married housing expense fairness

Post by HueyLD »

The OP said: “ I plan on retiring in 3 years and she will likely have at least 10 to 15 more years of working. At some point she will likely sell and we would move into my house.”

Obviously, fairness can only be determined by you and her jointly because what’s fair to one may not be fair to the other.

You can start by figuring out the rental value of your house if you rent part of the house to a complete stranger as a roommate. Run this idea by her when the time comes and she will likely come back with a counter offer. Depending on how much household chores you expect her to shoulder, she should be expected to be compensated for chores not normally performed by an uninvolved roommate. And negotiations may continue for a while.

It is better to iron out the details upfront and that may eventually involve a written agreement between two of you.
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Meg77
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Re: Not Married housing expense fairness

Post by Meg77 »

If you aren't planning to get married or put each other on the title(s), then I don't think it's reasonable to calculate a percentage of the home expenses and expect the other person to pay them (certainly nowhere near half!). This is especially because you both already own and plan to keep homes that you picked out yourselves - it might be different if you two were selecting a new residence to inhabit together. In other words, the partner moving didn't have any say in how expensive the asset was, nor will he/she have any ownership interest in it, so there is no reasonable basis for them having to pay a certain % of the maintenance, taxes, and so on.

Of course, any roommate or family member or romantic partner should contribute on some level to the household. It just doesn't need to be based on the value/cost of the home directly. Moving in together should benefit you both, financially and also from a housework perspective. This has to do a lot with hours worked and income earned though, moreso than the property itself. If you're retired once you're living with her and she's still working, then perhaps you'll do 75% of the housework and pay for groceries and dining out, while she still pays 100% of the property costs. That's just a rando suggestion, but whatever you all decide shouldn't have to do directly with the cost of the home or with whatever market rents are, in my opinion.

(Although in lieu of being able to come to another agreement, paying for half the market rent of what either house could go for is an objective starting point.)
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123
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Re: Not Married housing expense fairness

Post by 123 »

MTMOriver wrote: Mon Jun 10, 2024 11:03 am ...What should be the reasonable expectation for each to contribute to the home upkeep. Should a portion of taxes, HOA, and home maintenance and insurance be born by the person who does not own the asset?...
If you want to take a "business" approach, to maintain separate assets, figure out what you would charge a housemate/roommate. That way each of you can decide whether it's an advantage to share housing or continue to make your own housing arrangements independently. Many great relationships fail when the partners move in with each other. Absence makes the heart grow fonder.
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CAsage
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Re: Not Married housing expense fairness

Post by CAsage »

While living apart, no cost sharing (duh). Later... The owner should pay 100% of the costs to maintain a rental house (and the income is theirs, too). If you are living in a house that one of you owns, consider separating costs into "living/recurring" vs "capital/nonrecurring". "House sharing" expenses such as utilities, taxes, insurance, HOA fees, minor repairs, food, entertainment etc. can be split 50/50 or in proportion to income if there's a big disparity.. I would suggest that the owner of the property is in all cases responsible for capital upgrades and major repairs, since it will apply to their cost basis or future value. Works for us.
Last edited by CAsage on Mon Jun 10, 2024 12:47 pm, edited 2 times in total.
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MoneyOCD
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Re: Not Married housing expense fairness

Post by MoneyOCD »

With very little actual information given here is what I would see as faire being on either side of the equation for the period you are moving in with her.

1. Each take care of their own property, no need to mix it up ( Tax, insurance, mortgage, HOA fees and so on)
2. What you gain by living in her house - split in with her in half:
Rent before your mortgage, taxes and insurance, as you would pay it anyways, she does not have to subsides you (see #1 above). But I would split expenses relatered directly to renting - repair renters damages, management company fees if any and so on.

For the period when she moves in with you - If you want to live in her house for free in exchange of her living with you later on - personally I would not consider that fair as later on might never happen. She may decide to not sell and rent her home - then tables will turn, you will get share of the rent.
If she sells- you will need think of other arrangements but you both need to discuss in now that no one will be surprised later.

That is my take on fair. Others may disagree. 8-)
gotoparks
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Re: Not Married housing expense fairness

Post by gotoparks »

No, each person pays their own cost for their property, 100% on them. I'm not into fairness questions because they always involve someone who wants to get something for themselves. Depends on the arrangement but when you move in with her I would think paying her rent is fair.
oldfatguy
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Re: Not Married housing expense fairness

Post by oldfatguy »

"Fair" is whatever the two of you agree to do. There is no right or wrong in this situation.
argleflargle
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Re: Not Married housing expense fairness

Post by argleflargle »

When my ex boyfriend lived in my house, he paid below market rent to me. It meant that he was able to save extra money relative to a different rental arrangement and I didn't feel taken advantage of by him living rent free.

When we broke up, he used his savings for a down payment on his own house. Ultimately, I think we both found it fair even after the relationship broke down.
BirdFood
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Re: Not Married housing expense fairness

Post by BirdFood »

For now, I would be inclined to divide it all up:

- She pays for and maintains her place
- You pay for and maintain your place
- You receive rent for your place
- You pay her rent for living in her place. (Figure out market rent for the whole house; you pay her half that. If you're not really using half--say, she's holding guest rooms for her kids--you reduce your rent accordingly. If she has drastically more money than you and you would pay less than half if you were truly renting together from a separate landlord, reduce your rent accordingly.)
- When she sells and you move in together, she pays you rent for living in your place.

If you weren't holding your place for your kids, I might suggest that if you get married, after she sells, she puts some of the profit into your place and you become co-owners. But since you are holding it, I don't think that would work.
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MTMOriver
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Re: Not Married housing expense fairness

Post by MTMOriver »

Thanks for all the input, it's given me a lot to think about. For those of you who might opine some more here are a few more details. I'm 57 and plan on retiring at 60 and drawing SS as a widower. My base salary is higher than hers and with RSUs that I will cash out each year until retirement probably double hers. Her divorce structure includes a lot of child support for tax purposes but evaporates when the kids are out of the house. Her income at that point does not support the expenses needed to maintain her current house and that house will essentially fund her retirement upon sale. renting out my house easily will pay my mortgage, taxes and insurance and provide for maintenance and perhaps even provide some income for me in retirement.

Ultimately her position in retirement should be significantly better than mine so I want to be careful not to sink to much money into her asset that I will have no direct benefit upon its sale, but I also want to ensure I'm paying my fair share. If her house had a mortgage there would be no question as neither of us could afford to live there and fair market rent in this house is not affordable for me.

As much as she would like to stay in the house it's probably more feasible that she move in with me and determine what she should contribute to my situation.
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MTMOriver
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Re: Not Married housing expense fairness

Post by MTMOriver »

Thanks for all the input, it's given me a lot to think about. For those of you who might opine some more here are a few more details. I'm 57 and plan on retiring at 60 and drawing SS as a widower. My base salary is higher than hers and with RSUs that I will cash out each year until retirement probably double hers. Her divorce structure includes a lot of child support for tax purposes but evaporates when the kids are out of the house. Her income at that point does not support the expenses needed to maintain her current house and that house will essentially fund her retirement upon sale. renting out my house easily will pay my mortgage, taxes and insurance and provide for maintenance and perhaps even provide some income for me in retirement.

Ultimately her position in retirement should be significantly better than mine so I want to be careful not to sink to much money into her asset that I will have no direct benefit upon its sale, but I also want to ensure I'm paying my fair share. If her house had a mortgage there would be no question as neither of us could afford to live there and fair market rent in this house is not affordable for me.

As much as she would like to stay in the house it's probably more feasible that she move in with me and determine what she should contribute to my situation.
crefwatch
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Re: Not Married housing expense fairness

Post by crefwatch »

I wonder if:
  • You have evaluated the two houses as to suitability for aging, life on one level, no driving at night, etc.
  • Child desire to retain where they grew up
  • Your own attachment to the houses
  • Effort to manage a rental real estate business
  • Increasing maintenance costs with building aging
  • Health/Disability potential in the years before retirement?
I am not asking for more personal information, but your posts so far do not explain how it could be true that "Ultimately her position in retirement should be significantly better than mine". Age difference aside, her position sounds financially vulnerable.
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