About

Fair rent is a tool to try and fairly calculate rent for a house share between flat mates.

Calculating a fair rent price for a room is a tricky issue and can cause tension between flatties. There are numerous ways to split the rent between rooms:

  • Based on room size
  • Based on salary
  • Based on whoever shouts the loudest
  • Simply split equally

Though they all have their downsides, this tool uses a different approach, based on individual room preferences of each flattie. This method is inspired by this episode of planet money.

How does it work?

The core idea behind this method is a secret bidding war between flatties. Everyone gets the total rent price of the house to split between each room, from there each person then writes secretly what they would want to pay for each room. Once everyone has written down what they want to pay for each room, the price and owner for each room is calculated. Whoever bids the highest for a given room, wins that room, but the price is averaged over all bids for that room.

For example, Bob and Alice are going to be renting a 2 bed flat for $1000 a month, the flat has a big bedroom and a small bedroom with an ensuite. Bob really likes an ensuite so he's willing to pay more for that. He writes down $450 for the big room and $550 for the small room for the ensuite. Whereas Alice really wants a bigger room to store all her 6 pairs of skis, so she writes down $700 for big room, and $300 for the smaller room with the ensuite.

So with these bids, Alice wins the big room and pays $575 ((700 + 450) / 2) and Bob gets the smaller room and pays $425 ((300 + 550) / 2).

The nice thing about this method is they both pay less than their highest bid, so even if you don't get a room you want you end up paying less.

Why do I need this?

Instead of writing stuff down and manually calculating who wins what, this tool tries to simplify and automate the whole process

Edge cases

Bid ties

In some cases, their will be multiple people bidding the same price for a room. In this case the tool will pick the first person as the winner