The truth about One Direction's living arrangements and why they shouldn't rent - National The X Factor

Styles seems interested in buying a house instead of living in a condo, since he was also seen house hunting in London's Primrose Hill section in July 2012.

October 22, 2012 update: Horan bought an apartment from Marvin Humes of JLS for $3.5 million. Click here for more details.

September 16, 2012 update: The Sun has reported that Malik changed his mind about buying the $3.5 million Hyver Hill house that he agreed to buy. And naturally, the house owner is furious. An unnamed source told The Sun: "Zayn originally said he wanted the property and he and the owners were due to exchange contracts. But at the last minute his people notified the home's owners that he didn't want it any more.

Almost all major-label contracts are set up like the major label is a bank loaning out money to an artist. That expensive video that an artist made? The record company will charge the artist for it. That big tour that the record company may have funded to launch an artist's career? Guess who's really paying http://www.springer-marketing-seo.co.uk for it? The artist. That first-class trip to an awards show or other public appearance to promote an artist's music? The artist is paying for it in the end (unless the artist has an outside corporate sponsor paying for it).

October 4, 2012: Malik told The Sun that he has bought a five bedroom house near Styles' house in north London for $3.2 million. Click here for more details.

In cases where an artist is a flop and doesn't make enough money to pay back a record company, the artist is dropped from the record company, and the record company has to write off the artist's expenses as bad debt.

All of this may sound like boring topics for an accountant or attorney, but Payne and Horan would be well-advised to make a smart investment and buy their own homes as soon as possible. The Sun tabloid says it's "savvy" for Horan and Payne to rent. Actually, it's just the opposite. There is no logical reason for them to continue to rent in their current financial situation, unless they like to have huge chunks of their money essentially vacuumed out of their accounts and given to other people, because that's basically what's happening as they continue to rent. And if they aren't even living at their homes for a good deal of the year because of touring, it makes even less sense to throw that money away on rent.

Payne and his 24-year-old dancer girlfriend, Danielle Peazer, moved in together in 2012. They have been dating since 2010. Payne commented to The Sun about sharing a home with his sweetheart: "I can't have it too messy or she'll have a go at me. We haven't been there long. My girlfriend's there alone most of the time. It's just a base, really."

If you ever wonder why artists who sell millions can end up bankrupt, it's really simple: They spend more money than what they actually earn after taxes, after expenses deductions from their record company, and after paying all the salaries of people the artist may have on the payroll.

One Direction came in third place on "The X Factor" U.K. in 2010. Since then, the group has had No. 1 hits in several countries. One Direction's tours have been selling out within minutes. As of the end of July 2012, the group has sold 12 million worldwide in albums, singles and DVDs, according to Sony Music. One Direction's debut album, "Up All Night," is the best-selling debut album of 2012 in many countries, including the United States, where One Direction sells the most music. But the money that One Direction makes from music sales pales in comparison to the millions that the group makes from touring and merchandising.

"The owner hit the roof as he'd packed up the house and was due to move out of London to a new house in Hertfordshire where his son was going to school. But it looks like they will now lose that house because of this. They are all fuming. Now that Zayn isn't going to be moving in, the current owners hope the fans will move on."

Payne seems to have taken steps to buy his own home, as he was seen house hunting in London's Primrose Hill section in July 2012. Horan? Not so much. Ever since One Direction took a break from touring in July 2012, many of the public sightings of Horan are of him partying and drinking heavily.

But as One Direction started to make more money, most of the guys eventually moved out of the apartment building in 2012. Styles was first, when he purchased his own condo in London for a reported $920,000. Tomlinson was next; he bought a six-bedroom home in north London for $4 million. Malik was the third guy in One Direction to become a home owner: In June 2012, he purchased a six-bedroom, $3.5 million house (with an indoor pool) in north London's Hyver Hill section.

When there is a successful group like One Direction, media outlets tend to report how many millions the band makes in revenue. What they usually don't report is how much those revenues are reduced by expense deductions and taxes. (In the United Kingdom, people who are millionaires who have the U.K. as their main country of residence are usually taxed at about 80 percent of their income or more.)

In 2011, the members of One Direction (Payne, Horan, Harry Styles, Louis Tomlinson and Zayn Malik) lived in the same luxury apartment complex in north London (Friern Barnet). Styles and Tomlinson were roommates, while the other guys had their own apartment units. According to several published reports, the penthouse where Styles and Tomlinson lived rented for $19,200 a month.

The Sun recently did a misleading article saying that One Direction's management (Modest! Management) is paying most of the rent where One Direction's Liam Payne and Niall Horan currently live.



Make no mistake: Payne and Horan (who are both 19) are paying for all of their rent and other living expenses. While the group's management may be writing the checks for the rent payment, all of these expenses are eventually coming out of One Direction's future earnings. In the music industry, it's called "charge backs."

One Direction guys who are still renting: Be smart and buy a home before you're too busy with your next tour. Get on it.

When millionaire entertainers rent homes, it's usually because they are living somewhere for what they think will be a limited period of time. But if Horan and Payne think they will be living in London for years, then it's time they bought their own homes or they will continue to have their living expenses be a drain in their bank accounts instead of an investment they can make a profit on later when they sell a home.