Quick summary: I own my house. It's a 3 br, 2ba home, and I only use one bedroom and bathroom for myself. Recently a friend of mine proposed moving in. I've thought about it, and decided to offer them the other 2 rooms and bathroom to them for $500/month + half utilities.
I told another friend of mine (someone not directly involved) about this in passing, and they began to personally attack me for being a sham of a communist, and being a capitalist, and a landlord. They claim that what I'm asking for is steep. I understand essentially the place where their criticism is coming from, rent is a system of accumulation whereby I would be gaining wealth, and my friend would be receiving merely the permit to exist in my house. So on some level I understand and agree with the fact that this arrangement is essentially at odds with my beliefs.
Does this make me a sham? Brutal honesty please.
You're not leasing a housing asset, you're sharing a space. Sharing spaces and sharing costs is good and makes both of you better off for doing so. You should not feel guilty, it is still in the revolutionary spirit. People underestimate the cost of housing and I think you are giving them an extraordinarily good deal.
You don’t own a second house and you’re effectively losing free access to space within the house you currently live in. Two bedrooms for $500 seems fair but if you’re feeling guilty about it ask them what they can afford. This is cost sharing not exploitation in the larger sense. There are bigger fish to fry than someone renting out some space in their house.
You could look at the amount of your mortgage payment that goes towards interest instead of equity, think of that that as a rent you're paying the bank, and split that portion the same as you'd split rent. Then you're not really creating new oppression, just passing along existing oppression. Though you'd still owe your friend a portion of however much the home value goes up while they're there, of course.
Though I think there's something to be said for charging as low as you can actually afford, too. Sometimes doing the obvious good thing is just obviously good, you know?
I don’t understand the “you owe them if the house appreciates in value” part because you have no idea what the value of the house is until you sell it (which itself is a months long, labor intensive process that costs thousands of dollars).
Furthermore, what if the house depreciated in value? If the housing market crashed this time next year and the house lost an estimated $5000, would you stick your friend with a $2500 bill? Of course not. I don’t think this agreement should force OP’s friend to speculate on real estate prices just to get a room.
Also, you have to pay the whole mortgage to get the house. If you don't pay the whole thing for long enough, they can end up taking your whole house.
You could look at the amount of your mortgage payment that goes towards interest instead of equity
This is a pretty great suggestion. I'll have to do some googling into figuring out what exactly that math amounts to.
Your mortgage paperwork should have a lifetime total amount paid listed somewhere. Alternately, I think mine was 180% of the cost, and don't have any reason to think it's atypical, so 55% of the mortgage payment is equity.
You're fine. Though hilariously, I've been called "pro-landlord" by someone on here for saying that this sort of thing is ok. To be clear, housing is a human right and property should be forcibly expropriated and redistributed whenever necessary to ensure that everyone has a place to live.
But the problem of housing is not caused by individual actors and cannot be solved through individual actions. You could offer the room for free and it'd make a difference for that one person but at that point you may as well just give $500 to a random person on the street each month. Second, if you're living with them, you're probably in a similar boat financially and you're gonna want to take care of problems and shit. Third, nobody would give you shit if you just left the room empty. If you owned a bunch of houses that nobody could live in because you just wanted them for speculation, then people would rightfully be angry with you. But if people want to take issue with you, then they should take issue with anyone who has a spare room in their house they're not letting someone stay in for free, or hell, anyone who could have a bunkbed in their room that they could be letting someone sleep on. I'm probably never going to own a house, but if a friend offered me a good deal on rent on a spare room in their house, I'd be grateful, and as I see it it'd be totally unreasonable for me to get mad at them or think of them as an exploiter for it.
If your friend wants to be like, "Hey, I wanna stay here long term, any chance we could do some kind of joint-ownership and get my name on the mortgage too?" then hey, that'd be a pretty cool thing for you to do. Otherwise, :shrug-outta-hecks:
I appreciate your input quite a lot. This is pretty well thought out.
IMO, if they are not gaining ownership of the home in some aspect (equity, whatevs) then you should only charge them for their relative portion of property tax and utilities
them paying your mortgage is exploitation if they gain no equity.
them paying your mortgage is exploitation if they gain no equity.
Truth.
An option could be tracking the rent they pay, subtracting a proportion of that rent to cover property tax, utilities, and wear-and-tear, then return the rest at the end of the year or when they move. Either put it in a savings account until they move, or give it back once taxes are filed.
Covering the expenses of owning a home with a temporary resident will likely be much more amenable with a contract than with figuring bills out as you go. But balancing this back to them so you are not exploiting them can be a good solution.
Thanks for taking the time to give your thoughts. I don't have any desire to buy anymore properties, or to rent to any other people beyond this friend of mine.
I’m likely going to be in a similar situation. I bought a place with one more room than I need and a friend wants to move in (and I’d be more than happy to live with them).
I think it’s important to remember that for homeowners, most housing expenses do not go towards building equity. Property taxes, mortgage interest, insurance, condo fees/maintenance…all of this is functionally the same as paying rent. If someone moves in, I don’t think it’s unreasonable for these expenses to be shared. The principal of the mortgage should be the homeowner’s responsibility only since that’s pure wealth building.
I would also point out that by renting this room, you’re building more density in your community, saving your friend from an exploitative landlord, and making the housing market in your area just a little bit less competitive (which lowers rents for everyone down the line!).
You have to be sure not to exploit them, or to minimize the exploitation inherent in the landlord/tenant relationship (because that’s what it is). No charging a security deposit, no pet rent if they have one (although i don’t think asking for like…a carpet cleaning once every while would be insane since pets do that), etc.
You want to live with someone and share the costs of living there. Your goal is to agree with your tenant on the cost of living in that room. Determine the monthly cost of operating the space and charge it. This amount is not the same as the “fair market value”, obviously, since the fair market value is just the most you could exploit them for before they say no.
Anyone calling you a sham of a communist for sharing housing with someone is a fucking idiot.
(PS whatever you end up agreeing to you have to consider home maintenance costs)
Thank you, I appreciate you speaking at length about this. These are a lot of good points that I had also not considered.
this doesnt make you a sham. your friend is a liberal, bourgeois morality is stupid.
Just rent to them. You're sharing your space, so it's not like it'd be going to waste or whatever.
Don't hound over rent if they're struggling and make it clear you appreciate them helping you pay for the bills.
Try not to profit, just have them cover their costs, and if there's extra try to give it back in some way.
Idk it's dumb to stress too much about it, your other friend is overreacting.
There's now going to be a class divide between you and your friend who will be living there though, so do your part in blunting the edges of it.
I rent a 2br. One roommate moved out and another comrade moved in. The lease is in my name and I charge new roommate $300 a month to help cover rent. Is there a class divide here?
I lived alone for a few months. I could easily afford rent even with one bedroom empty. I have power to allow or deny access to housing that he would be hard-pressed to find an alternative to.
So on my end, there's no class divide, but on his end, he directly owes me money every month, and struggles to come up with it due to other expenses. Is a class divide objective, or experienced? concrete, or relational?
The issue I'm referring to, in the case of the OP, is that their friend/room mate will be helping them pay the mortgage of the house. The mortgage will increase OP's capital and put him into the home owning class of the US, while the roommate will gain nothing tangible from the transaction in the long term.
In essence the roommate will be transferring wealth to the OP, increasing their capital, without a return.
This is the same issue with landlords as a whole as well, which is where the class divide is.
OP will be moving upwards in societal mobility, his roommate will be moving laterally at best.
In your case, neither of you are benefitting from this except in the short term. Your capital holdings will be the same at the end of it and you are transferring wealth to a landlord.
We both make between 10 and 20 an hour, depending on the job/gig/circumstances; we're pretty close in earnings/hours. But he has debts that threaten to control his life, while I will be putting a large down payment on a house by the time this lease is up. The 3k I hope to get from him will allow me to make that capital investment sooner. We're both transferring wealth to the landlord, but I will come out much further ahead. Is this not a degree of class distinction?
Probably closer to a privilege rather than a class distinction at that point, though others might have different opinions.
Ive always seen it as who is exploiting, if you have the means to exploit someone's wealth from them then you are generally of a different class. In this case your landlord is still the one doing that, you're just sharing that burden with someone else which is allowing you some additional mobility.
It's not an egalitarian situation by any means, and is probably an example smaller divide within a class, but he's not actually paying your mortgage at this point.
Obviously there's stuff like your familial backgrounds, the reasons behind his debts, and a ton of other potential things that could change this.
But just purely on the face of you being better off while cohabitating I don't think that large of a divide is quite there.
internet crapped out and it posted that like 4 times lol my b
Maybe you could explain your thoughts to friend and ask what they would like to pay?
My friend and I have not actually met face-to-face yet to discuss this formally. I'm definitely open to any negotiations or compromises they might ask for.
I don't think it seems like a big deal. You're not taking advantage of someone down on their luck, you're giving them a better rate than what they'd ever find in an apartment and you get a little help back.
Just don't take a deposit or anything and hopefully it'll help them save up and get their own place.
I did a "whatever you can afford after bills" situation with our friend who was struggling. Ended up living with me for shy of 8 years. I think it saved his life. And he usually gave us between 3-500 dollars a month. The fact was I never expected him to pay - I think that was the difference.
You are looking at charging your friend $6000 a year plus utilities (which are fairly split).
Total up what you will pay over the course of the year in mortgage, property tax, home insurance, and related fees. Does it add up to less than, say, $5500? If it does, then you are making money on the arrangement (although compared to market rental rate it will still feel like a favor to him). If it's not substantially shorter than 6K, then don't worry about it.
If you're really concerned about it, do what @asaharyev suggested: put the "rent" payment into a separate account, and then anything in that account that goes over the yearly sum you determined above can be returned to your friend when they move out or after a certain term period.
There is a difference between deciding you have more space than you need and deciding to split the space and financial burden with someone else, and buying housing with the sole purpose of extracting as much value out of it as possible.
Very true. Having said that, in this situation, if I were not to ask for rent, I would probably prefer to continue living alone. Should I just call off the preposition all together?
Seems wasteful to leave a good living space unoccupied for the sake of ideological purity
It seems wasteful to me, too. Exactly why I'm pondering renting at all.
IMO, just do your best to not exploit them. If your paying mortgage then rent can be a way to help you pay that off. But if you don’t even need that cuz you literally own it then what’s left? Property tax? Utilities? Get them to pay some of that. You also have to make sure they don’t exploit you obviously.
I still have a long way to go on the mortgage. However, even having said that. Their payments to me go toward equity on my house, whereas they don't get any sort of equity in return. So rent is all around exploitation no matter how I slice it.
Okay, remove money from the equation for a bit. You’re helping your friend big time. In our ideal world that’s all there would be to it. Now, if you need something from them, then your friend will help you too. That’s on them. So, if that need of yours is money (~$500 a month) then they give you that of their own free will to help you out. Maybe you don’t need any help right now but will later on and they can help you then.
Essentially, try to not “commoditise” this relationship and think about how it would work in a better society. Then just try to enact that right now.
Thank you, this is a really useful way to look at the situation.
