I rented a 3-bedroom condominium for $1,500 and charged my roommates $800 per room. I bought a $100 minimize every month. Was I flawed?


He got inconsistent rents from renting rooms. Empty rooms paid $ 0. His rent was $ 500 per room. I took the entire rent on myself: $ 1,500 a month plus utilities. Room rents in the area were $ 700. I have repainted. I’ve set up the place. I kept it.

I took a room myself and rented the other two rooms for $ 800, each paying a third of the utility bills. I did the job of getting the roommates. You paid yourself. When they left, the financial burden was on me. I risked the investment. My logic: I should be paid for my work.

In my opinion, they didn’t deserve the right to pay $ 500 a month. The market rent was $ 800 for the equipment and location, and it was furnished. My rent was a third of the utility bills and I was making $ 100 a month. The landlord got $ 1,500 a month on time.

Eight years later, the gig ended with the sale of the house.

Was i wrong

Landlord / subtenant

You can email The Moneyist at qfottrell@marketwatch.com with any financial and ethical issues related to the coronavirus and follow Quentin Fottrell on Twitter.

Dear landlord / subtenant,

Skimming vs. scamming. There’s a fine line between the two.

Are you an enterprising lodger who knows how to romp around, or the roommate from hell? Or somewhere in between? They put your name on the lease and took relatively little financial risk, something that shouldn’t be used to charge them $ 300 extra each month. A perfect ruse for someone new to town.

Here’s the cloudy part: it’s not transparent. You didn’t tell the people you lived with for eight years that they were effectively paying your rent. You also did not tell the landlord that you secretly increased the agreed rent and skimmed off the upper limit and thus violated the standard “no subletting” in landlord-tenant contracts.

There is one other person you need to say too: Uncle Sam. If you thought you were 100% correct, you should follow this sophisticated logic to the finish line and declare the money as income. It is a double business if you suddenly stop when it is detrimental to you.

I reject the following inhospitable – possibly even hostile – attitude in your letter: “You did not earn the right to pay $ 500 a month.” Wrong. They had the right to pay the rent set by the client. The furniture you provided did not belong to them and they likely did the paint job for the first month.

I dislike the inhospitable – possibly even hostile – feeling: ‘You didn’t deserve the right to pay $ 500 a month.’

But those tit-for-tat details are hardly the point. From what you say in your letter, you kept the actual rent for the house a secret. Try the “do with others” test: If the situation were the other way around and you learned that the person sublet the space benefited from you, how would you feel about it?

So why is it okay for someone who owns a property to ask for rent and make a profit? A landlord who already overtly has more power than the tenant is transparent about their profit goal and is ultimately liable for any liability, including fire or damage to the property. As a non-owner, you are not.

You were a co-tenant who – as far as your co-tenants knew – was economically and socially equal. You had the lease, but you were a roommate. There is a pervasive element of delusion, especially when you know there would be anger and breach of trust if they found out.

“You were a co-tenant who – as far as your co-tenants knew – was economically and socially equal.”

Your question is similar to the difference between the letter of the law and the spirit of the law. Even if you haven’t broken sublet rules with your landlord or the law with Uncle Sam – a scenario that seems very unlikely – it doesn’t necessarily mean that you are adhering to a social norm or moral code.

The Italian-American philosopher Cristina Bicchieri speaks of social norms as “the language of a society, the embodiment of its values ​​and collective desires, the safe guide in the insecure countries we all traverse, the common practices that hold human groups together”.

A social norm is established when boundaries are placed on behavior and decisions to reduce the likelihood of injury or injury. It teaches us to respect each other’s personal space and not to take advantage of one another. Best and worst of all, it’s up to each of us to set the moral thermostat for our own lives.

But your actions lead to three injustices: your tenants for the reasons stated above, Uncle Sam for using your roommates as income, and the building owner who is ultimately responsible for the welfare of his tenants and is unaware of your agreement with them Persons.

Breaking the contract with your landlord and the social contract with your roommates does not show entrepreneurial skills and shows capitalism at its best, but uses other people’s assets to make extra money on the side without their permission or knowledge. It’s bad form, I’m afraid, and sharp exercise.

Check out Moneyist’s private Facebook Group in which we look for answers to life’s thorniest questions of money. Readers write to me with all sorts of dilemmas. Ask your questions, tell me what you want to know more about, or take part in the latest Moneyist columns.

The moneyist regrets not being able to answer questions one by one.

More from Quentin Fottrell:

• My married sister uses the most precious possessions of our parents. How can I stop them from ransacking their home?
• My mother had my grandfather sign a deed that left two grandchildren millions of dollars and avoided everyone else
• My brother’s soon-to-be ex-wife embezzles money from her business. How do we find hidden accounts?
• “Grandmother died recently and left a seven-figure estate. Needless to say things are getting messy ‘

You might also like

Leave A Reply

Your email address will not be published.