Years ago, friends Karen Bush, Louise Machinist and Jean McQuillin, three Pittsburgh-area women in their 50s, were living alone in homes larger than they needed. The trio sold their homes and together bought one house to share. Not only was the shared house nicer than any they could afford to own separately—by sharing it, each of them cut housing costs sharply, and living in one home was safer, less wasteful and much less isolated than living separately.
Sharing homes with nonrelatives is common among cash-strapped young adults, but it’s rare among people in or near retirement. That could be a missed opportunity. Sharing a home worked so well that when Bush and Machinist relocated to Florida a few years ago, they continued sharing a home there. They also went on to write a book (with McQuillin) and lecture extensively on the topic. Bottom Line Personal asked them how our readers can make “homesharing” a financially and personally rewarding experience…
Finding and Vetting Potential Housemates
Housemates should be dependable, considerate, financially stable and have values and living styles that do not conflict with your own. You might already know one or more people who fit that description—if so, great. If not, the odds of finding such people through listings on sites like Craigslist or other essentially random “roommate” resources are low. Instead…
Find candidates through groups you belong to. This could include your place of worship…charities you volunteer with…or social circles. Are there other people in groups you belong to who are living alone? Consider these people with two questions in mind—do they generally go along with what the group decides without raising a fuss?…and do they do more than “their share” of the work, perhaps arriving early to help set up for events or staying late to clean up? Traits like these are signs that they will make great housemates.
Visit potential housemates’ current homes. Is their housekeeping roughly comparable to your own? Pay particular attention to kitchens and bathrooms—these spaces are common areas of contention in shared homes. Visit their homes before raising the possibility of living together, if possible, so there are no hard feelings if you see warning signs that you might not be ideal housemates.
Take a trip together. Do this after you have discussed the possibility of living together but before any commitments have been made. The stress of travel makes it a wonderful housemate test. Do your potential housemates respond to the inevitable travel headaches with good humor, emotional stability and problem-solving skills…or do they get angry or fall to pieces? The stress responses you see on this trip are likely to be the same ones you will have to live with if these people become your housemates.
Share a home together before anyone gives up his/her current home. Do this for at least a month and up to six months if possible—and do it even if you think you already know your potential roommates well, because living together is not the same as “just” being friends. If one of the potential housemates currently has a home large enough for the group, this could be a good place for this homesharing dry run. If not, see if you can find a short-term rental.
Financial and Legal Details
Becoming housemates is a financial partnership, but there are ways to minimize the risks.
Carefully select a home-ownership structure. A “tenancy in common” deed allows multiple housemates to own property together, and housemates can leave their shares of the property to their heirs when they pass away, if they choose, not just to the surviving housemates. You might have to contact numerous mortgage lenders to find one willing to make a loan to buyers using this relatively uncommon form of ownership. (And speak with a qualified real estate attorney about the pros and cons of this sort of deed.)
Alternatively, one housemate could own the property while the others pay rent. This is appropriate when one housemate is in a significantly stronger financial situation…when one housemate already owns a home big enough for everyone…or when housemates wish to minimize their financial entanglements. This arrangement can, understandably, lead to housemates not behaving as equals when it comes to decisions about the home, so if you choose this route, be sure that the owner of the home is a person whose nature leans toward compromising.
You could instead all rent a home together—just like most young roommates do—as long as you’re all happy having a landlord who has ultimate control over the home.
Have “exit rules” in place from the start. All housemates should have the right to move out or to require other housemates to move out if they do not pay their share or follow agreed-upon rules. But how much time will housemates have to plan their next step if this happens? What if one housemate dies—will this deceased housemate’s heirs inherit a share of the property? Preferences vary widely, so the best thing to do is order a pizza, sit down and have a big, friendly meeting to discuss in detail what works best for everyone. You can find sample contracts by searching online for “model homeshare agreement.” Important: Whatever you agree to, have a real estate lawyer review it.
Have every housemate’s financials reviewed before taking the plunge. You don’t have to reveal all your financial info to one another if you don’t want to. But to ensure that everyone can support the arrangement, have the group pay a fee-only financial planner to take a look at each would-be housemate’s investment statements, recent tax returns and credit scores to confirm that everyone is likely to be able to afford whatever arrangement you intend. This shouldn’t cost more than a few hundred dollars.
Agree which bills will be shared. In addition to base housing costs—mortgage or rent, property taxes, upkeep, utilities and insurance—will the group split a home phone line? Groceries? Internet? How will unexpected expenses, such as major home repairs, be handled? There should be an account for emergencies into which each housemate makes regular contributions.
Living with other people always has its challenges, whether it’s a family or a homesharing arrangement. For the best chance of success and happiness…
Consider your housemates neighbors, not your new social circle. If you are or become close friends, great—but don’t enter the arrangement with that expectation, or you could easily be disappointed. Maintain your own social circles even if you do become close because people who live together tend to be happier when they spend time apart, too.
Put a few essential ground rules in writing and play the rest by ear. Three important ones: (1) Housemates must deposit the agreed-upon rent/mortgage amount into a joint bank account by a specific day each month, (2) Each housemate’s private room is 100% private—no one else enters without permission except in emergencies, and (3) Visits by guests are not allowed over a certain limit—for example, seven consecutive days and 21 total days per year. Otherwise, you could essentially end up with roommates you didn’t agree to such as romantic partners or live-in grandkids.
Other issues that could be included in the written rules: What temperature will the thermostat be set to? What hours can music or TV be played? How will chores be divided? But if you are confident that you selected good housemates, you don’t need to put such details in writing—the group will work together to find solutions if problems arise.
Choose a home with private bathrooms for everyone, if possible. Shared bathrooms are a common source of housemate friction.
Discuss decoration. Which housemate’s furniture will go in which rooms? Whose art will hang on which walls?
When conflict arises, remind yourself, This is not my house. Everyone has an opinion about how a household should be run. Sharing a home requires that people set these opinions aside and find common ground, usually by compromising, which takes getting used to.
Have a plan in place for conflict resolution. For the happiest life as housemates, you all should agree to search for solutions that give everyone what he/she wants whenever possible. Example: We disagreed about whether to have a dishrag or sponge by the kitchen sink. (Yes, it’s trivial, but emblematic!) We decided to have both—there was no need for anyone to be dissatisfied with something so minor. However, you need a plan for when this isn’t possible. The first step might be that the majority rules (if there is a majority) when housemates are at odds. Next, agree to seek input from a third party, such as a professional mediator or a pastoral counselor, if that leaves someone significantly unhappy with a decision. But if you’ve chosen your housemates well, that probably will never happen.