How much can I afford?
The Sorted budgeting tool is an easy way to work out if you can afford to live on your own. It’ll ask you to include regular flatting expenses like transport and meals, as well as one-off costs such as doctor visits (it's easy to forget about these and they can throw off the budget).
Victoria University also has a student financial survival guide with sample budgets to help estimate the costs involved with flatting.
The biggest ongoing cost of flatting will be rent, which most people pay weekly or fortnightly. The Department of Building and Housing’s Tenancy Services website will give an idea of typical rents in different areas.
Before moving into a flat it's usual to pay a bond of up to four weeks' rent as well as two weeks’ rent in advance – so if rent is $150 a week that will mean paying up to $900 before moving in. Often there is also a non-refundable letting fee equivalent to one week’s rent plus GST.
The landlord must pay the bond to Department of Building and Housing within 23 working days, where it’s kept safe until you leave. The Tenancy Services website has more information about bonds and how they work.
Keep in mind that unpaid rent can affect your credit reports and ability to borrow money in the future.
Living costs when flatting
As well as rent you'll need to pay power, phone, internet and sometimes water bills. Costs vary from flat to flat and suburb to suburb. You may also need to pay bonds to get set up with power and other services.
There may be lots of things you suddenly need when flatting, like a couch, washing machine or TV.
In a large flat or with new people, it might be easier to hire appliances and split the rental charge. That way everyone knows exactly how much each person's share is and there's no argument about dividing things up at the end.
Sometimes it’s easier, although more expensive, to choose a deal that doesn't require a deposit.
Whose name will go on the bills for power, internet, etc? If it's yours, you’re responsible for payment even if the flatmates leave without paying. It's a good idea to have everyone’s names on bills or share them around to reduce the risk.
It's worth reading the meters regularly so you're not hit with a big bill after your flatmates have moved out. A large unpaid bill could have a bad effect on your credit reports, which could limit your choices in future.
If the flat is reasonably stable, you might want to set up a joint account for the rent and/or kitty. Each person makes automatic payments into this account, from which rent and bills are paid. Setting up direct debits from the joint account will make sure bills are paid on time and lets you take advantage of any prompt payment discounts.
It’s a good idea for one or two flatmates to keep an eye on the flatting account, just to make sure it’s all working as it should be.
Whichever way you choose to divide costs and pay for things when sharing a flat, it's a good idea to keep written records of kitty payments and bills. Tenancy Services has forms you can use for tracking rent payments.
If the flat’s already established, ask about how all these things work before moving in. If paying the bond to a tenant rather than the landlord directly, make sure to get a written receipt. It’s a good idea to sign a flat-sharing agreement, too.
Getting insurance when flatting
When starting out you may not have much stuff to your name! And if you don't own a lot it may be tempting not to pay for house contents insurance.
What many flatters don't think about is what happens if the landlord's property is accidentally damaged by any of the flatmates.
If you cause a fire you could be charged tens or hundreds of thousands of dollars for the repair. A contents insurance policy can cover you for personal liability in a situation like that.
You will also need to have contents insurance to get EQC cover for damage to your belongings caused by a natural disaster.
Find out more about the different types of insurance.
What happens when I leave the flat?
If you’ve paid a bond or owe money on bills you'll need to sort this out with your former flatmates. In particular, you’ll want the bond back to pay for your next flat!
If the bond was paid to the landlord, Tenancy Services has information about how to get a bond refunded or transferred to another flat. If there is damage to the property or unpaid rent owing, this will be deducted from the bond before it’s refunded.
If you’re leaving a flat but the others are staying on, you need to make sure your name is taken off the tenancy agreement. Otherwise you could end up with expensive debts if the flatmates you leave behind don’t pay their rent, or damage the property.
If things go wrong
Sometimes things can get a bit much – just don’t wait until a small problem becomes a big one.
Struggling with living costs? Visit the Family Services Directory to find your nearest financial capability (budgeting) service.
Problem with the landlord? Call the Tenancy Services helpline on 0800 83 62 62 (0800 TENANCY) for general advice, or 0800 737 666 for bond-related information.
Universities and other educational institutions often have advisory services available for students.
A number of community organisations can also help tenants and flatmates, such as local tenant protection associations in Auckland, Palmerston North and Christchurch; the Citizens Advice Bureau or a local community law centre.