“Will you marry me?” is an expensive question to ask on Valentine’s Day. “Will you move in with me,” however, could mean big savings.
New research shows that a couple can pocket thousands of dollars by trading in separate one-bedroom apartments for a two- or even three-bedroom pad.
Couples can save 35% of their combined monthly rent by switching to a two-bedroom apartment and 12% for a three-bedroom apartment, according to real-estate website Trulia, which analyzed its nationwide rental listings. Jed Kolko, chief economist at Trulia, compared apartments in the same building—instead of the median rents for apartments in the same or even a nearby neighborhood—to make sure the comparisons were apples to apples. (By moving into a one-bedroom apartment, they obviously save 50% of the monthly rent.) “It might not be the romantic discussion you expected,” Kolko says, “but these savings could make the proposal a little more compelling.”
These savings vary wildly across the 25 largest rental markets in the country, however. Sacramento, Calif., which has a median monthly rent of $1,000 for a two-bedroom unit, had the largest “shacking up discount” of 40% for a couple who move from two one-bedroom units to a two-bedroom unit and 21% by moving into a three-bedroom unit, Kolko says. Couples in Riverside-San Bernandino, Calif. and Las Vegas, Nev. could save up to 39%. New York, which has a $3,000 monthly median rent for a three-bedroom apartment, had the least savings with a 28% discount for a two-bedroom and a 2% discount for a three-bedroom. Dallas had 30% and 2% discounts, while Houston had ones of 32% and 6%.
Word of warning: Money should not be the primary reason why people move in together, says Fran Walfish, a therapist in Beverly Hills. Couples should be together at least six months to a year before deciding to make the leap, she says. Anyone can be “lovey-dovey” and put their best foot forward when they’re living apart, especially in the early days of a relationship, she says. But “some people collapse and hibernate when they experience conflict,” Walfish says. “Other people attack and say, ‘Okay I’m out of here.’” Neither approach to solving problems will work, she says. “How people deal with their differences tells us a great deal about whether they’ve got the stuff to make it in the long run.”
Top 5 “shacking-up discounts”
Bottom 5 “Shacking-Up Discounts”
Source: Trulia; among 25 largest rental markets.
Another question to consider: Whose possessions do you get rid of and why? In-house storage wastes space and professional storage wastes money, says Andrew Mellen, professional organizer and author of “Unstuff Your Life!” He recommends making any curating decisions before the move to reduce the cost of moving and sifting through excess household items post-move. Sell what you don’t need now, he says, or donate them and reap the tax benefit. “If the old sofa didn’t make the first cut, it’s unlikely to make the second or third cut,” Mellen adds. “I’m suspect of people who keep replacement items in storage after they move in together. You may be undermining the relationship by hedging your bets.”
Full financial disclosure is also essential before green-lighting a move, says Lisa Featherngill, a member of the National CPA (Certified Public Accountant) Financial Literacy Commission, part of the American Institute of CPAs. “You’ve got to think about it as a romantic partnership,” she says. Before combining assets, open up about income and expenses, and assets and debts. “The person you’re moving in with might have a lot of debt that prevents them from paying the rent or monthly bills and unpaid bills could impact everybody’s credit.” After rent, cable bills can be one of the costliest expenses, she adds. “If he wants the full package of sports channels, are you both going to pay half or will he pay more?” she says.
Money is the most common source of discord among American cohabiting couples, studies suggest. They cause three arguments a month, according to a 2012 survey carried out by Harris Interactive for the American Institute of CPAs. Around 27% of couples said disagreements over money are most likely to prompt a spat, making it more common a cause for fighting than children, chores, work or friends. Half of couples argue mostly about surprise purchases and one-third argue about insufficient savings. It isn’t romantic, but Featherngill says it doesn’t hurt to decide if one or both parties go on the lease, and who will live where should things go wrong. “I always believe in having an exit strategy,” she says.
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