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Barefoot Investor: Life’s essential lessons can be learnt in share housing

You’re not living until you’ve had at least one stint in a share house — it’s the ultimate rite of passage. And for the unwary, Barefoot Investor has some sage advice.

There are plenty of perils in house sharing.
There are plenty of perils in house sharing.

There comes a time when every young person flies the coop.

When I was in my early twenties I rented a shoebox flat in the armpit of St Kilda.

My landlord, an excitable 70-something Jewish man, lived upstairs with his excitable 20-something Russian bride.

(They had a tumultuous relationship — they were either loving or fighting, but they were always very, very loud.)

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Cooking is among the many hurdles to jump when moving into a share house.
Cooking is among the many hurdles to jump when moving into a share house.

My entrance to the flat was via a dodgy back alleyway.

Someone had obviously tried to jemmy the door open, because as I was leaving for work the front door handle fell clean off.

So I called the landlord. A few minutes later he came downstairs with a screwdriver, which he handed to me. “You want me to fix the door?” I asked.

He took a long drag of his cigarette, and began to chuckle. “No. This is your new door handle, key, and security weapon … all rolled in one!” he barked through a coughing fit.

True dinks.

I still remember the strange looks I got when I arrived at work with my screwdriver.

My country-living parents found these big-city stories highly amusing.

They were the ones, after all, who (lovingly) threatened to change the locks on our family home, and thus drop-punted me into the real world 20 years ago.

What a learning experience it was!

I learnt how to make my money stretch (hello homebrew), how to cook (once a flatmate asked me, “How long do I cook two-minute noodles for?”), the art of diplomacy and negotiation (eventually the landlord replaced the door handle with a … second-hand handle), and the importance of cleaning (something admittedly I hadn’t placed a high value on … because until that point my mother had done it for me).

Yes, you’re not living until you’ve had at least one stint in a share house — it’s the ultimate rite of passage.

And as you read this, kids across the country are spreading their wings, flying the family nest and landing in their very own rented armpits. So this week I’ve decided to answer their questions.

Q&As

HOUSE OF THRONES

SIDHARTH ASKS: I am considering moving into a share house with a couple of friends so we can be closer to uni. It would be my name on the lease.

My question is, how do we manage the bills? Should they be in my name and my friends pay me? And how can I cover myself in case anything goes wrong?

BAREFOOT REPLIES: They may be your mates now, but they will soon become allies … or enemies — Game of Thrones-style. (Trust me, you never really know someone until you have to share a bathroom with them.)

So, like Game of Thrones, you need a document that sets out the rules of war:

Decide whose name each bill is in — but make sure everyone gets at least one bill in their name.

(And don’t forget the bill called “shared household necessities” like toilet paper, sugar and homebrew.)

Like <i>Game of Thrones</i>, you need a document that sets out the rules of war. Picture: Helen Sloan/HBO
Like Game of Thrones, you need a document that sets out the rules of war. Picture: Helen Sloan/HBO

Also, have an agreement on how the bills are split, which will sometimes
depend on who uses what (think gamers who
constantly use the internet, weirdos who want always-on aircon).

I’d also strongly suggest you look at using bill-splitting apps like easyshare or Splitr that let the tech do the money-crunching and send gentle reminders.

Finally, if you’re smart you’ll include rules that cover the following: household chores, moving out and the dreaded partner who stays over repeatedly without paying their way.

Winter is coming, Sidharth!

DO I NEED RENTER’S INSURANCE?

MARDI ASKS: I am a renter, and recently my new property agent mentioned contents insurance.

I understand that the building is covered by the landlord, but I have never bothered with contents insurance before.

I just had a quick google and it is a minefield!

There is “contents insurance”, then there is “renters contents insurance” — I have no idea what the difference is and which one I should be looking at. Any advice?

BAREFOOT REPLIES: Just so we’re clear, renter’s insurance (which is the same as contents insurance, just for renters) covers your personal contents at your property, and usually with an option to cover your personal effects when you’re out and about, whereas landlord’s insurance covers the building structure itself.

I did a few online comparisons for budget renters insurance, and the cost for insuring $20,000 worth of contents against fire, flood and theft ranged from $150 to $300 per year (though it may be different based on your own situation and what you want covered).

If you’re in a share house it gets a little trickier (you can’t insure individual rooms), but some policies allow you to detail the items you want to cover. If all your flatmates have expensive stuff like laptops, fancy cameras, phones and jewellery, it may be worth you all chipping in for it.

Bottom line? If your most expensive possession is a Bob Marley bong, perhaps you can pass on it.

Otherwise, add up the cost of replacing everything and then run the sums.

FIRST-TIME RENTER

HARRY ASKS: I have been invited to move in to a share house with a friend of my brother’s.

He says I will have to go on the lease to replace the guy moving out.

I have never moved out of home before, let alone taken on a lease!

How can I cover my back if things go wrong?

Could I get left in the lurch? How much do I need to save?

What should I do?

BAREFOOT REPLIES: So many questions, Harry. You’re like the rookie on your very first footy trip, aren’t you?

Your brother’s mate wants you to be a co-tenant, which, as you’ve said, will put your name on the lease.

(Personally, I’d ask him if you can be a simple subtenant and leave him on the hook … but that’s just me.)

Either way, you’ll have to go through an application process, provide references, and get accepted by the landlord.

If you’re going to sign a legally binding contract, do yourself a favour and actually read it.

It will set out the expiry of the lease, cleanliness, repair and maintenance clauses (including whether you’ll get a screwdriver for a key), sub-letting conditions, and importantly, detail your bond and rent payments.

Then there are your costs: you’ll have to divvy up the bond with the outgoing tenant (and, along with the landlord, sign a bond transfer form), pay your rent in advance and start coughing up for household bills.

So how can you survive in the big league?

Well, my advice would be to gather up all your expenses, head to the pub, have a Barefoot Date Night, and set up your buckets.

DUMPSTER DIVING AND STUDYING

TIM ASKS: My girlfriend and I are full-time uni students living an hour from Sydney.

My girlfriend works one day a week, while I do not work because I have classes five days a week and am really struggling with my studies.

We both receive government payments and live cheaply — we dumpster dive for food. Is not working justifiable while I am a student, or am I just rationalising laziness?

House sharing is not always such a happy experience.
House sharing is not always such a happy experience.

It is frustrating not getting ahead financially for the past few years and Centrelink is bad for the ego, but I do pay a lot to study.

BAREFOOT REPLIES: Wait, you really dumpster dive for food?

(Readers, help me here: is this a term kids use these days for being broke, or is he literally diving into dumpsters?)

Look, if you’re really eating Happy Meals that have been thrown out by the colourful clown, you and your girlfriend have serious issues, dude.

Either way, my answer is the same: get a job at the Golden Arches and do what kids have been doing since Ray Kroc was a kid: eat food while you’re earning the minimum wage, you McNugget.

If you have a burning money question, go to barefootinvestor.com and #askbarefoot

The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need (HarperCollins) RRP $29.99

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice

Originally published as Barefoot Investor: Life’s essential lessons can be learnt in share housing

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Original URL: https://www.dailytelegraph.com.au/business/barefoot-investor/barefoot-investor-moving-into-share-housing-helps-you-learn-life-lessons/news-story/b4d2f8a4a74e204d849b2a62879ac424