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My boyfriend wants to pay me $500 in rent

Discussion in 'Real Estate & Other Investments' started by Scorpio, May 10, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    The Moneyologist: My boyfriend wants to pay me $500 in rent — and live for free when I’ve paid my mortgage

    By Quentin Fottrell
    Published: May 9, 2017 1:36 p.m. ET







    This woman wonders whether her partner’s request is reasonable


    [​IMG]
    Dear Moneyologist,

    I read your column faithfully, and I hope that you can answer my question! I feel really awkward about asking it.

    I own a house and have been scrimping and draining every investment you can think of in order to pay the mortgage as quickly as possible. I think I’ll have it paid off within two years if I continue to make the maximum payments.

    My boyfriend, who is renting an apartment for $1,200 a month, is thinking of moving in with me. We talked about his paying “rent” in the amount of $500 per month, but now he’s wondering if he could do that only until the mortgage is paid (and then live here for free, paying his share of the utilities, of course). I’m uncomfortable with this but, at the same time, I wonder how long he would need to pay rent for, were he to pay $500 per month beyond the end of the mortgage.

    We are hoping to jointly buy a condo in about five years, in which case the purchase would be a shared expense. I don’t want to appear to be cheap. Of course, we’re going to have a cohabitation agreement, but this is a sticking point.

    I’ve paying about $1,700 per month in accelerated payments. I’m also paying a lump sum amount of about $40,000 per year, just to pay off my mortgage quickly. I don’t want what he pays to be a function of the mortgage because the house will stay entirely in my name. Roommates pay $500 on average for shared accommodation where I live. Also, it’s what I charged previous roommates to whom I rented out my spare bedroom. I should say that my boyfriend is very nice and not cheap (generally), so this idea that he not pay rent once my mortgage is paid surprised me.

    Do you think it’s inappropriate to expect him to pay $500 per month in rent before then?

    Marie

    Dear Marie,

    Sometimes, the clue is in the question. In this case, the clue is also in the headline. And it’s not pretty.

    The worst thing you could do in a situation like this is agree to something because you want to avoid an uncomfortable conversation. People let hundreds of thousands of dollars slip through their fingers in salary negotiations and bartering over a house price due to feelings of stress and anxiety. It’s not worse because he is your boyfriend, it’s actually better. See this as a test case for how you will approach every important discussion in your life. Explain your reasoning and feelings calmly and nicely. That way, you get to say anything and everything you want.

    As former Federal Bureau of Investigations hostage negotiator Chris Voss wrote in MarketWatch last year: “The No. 1 rule in any negotiation is don’t take yourself hostage. People do this to themselves all the time by being desperate for ‘yes’ or afraid of ‘no,’ so they don’t ask for what they really want. Instead, they ask for what they can realistically get. I’ve heard many people say, ‘Well that’s a non-starter so we won’t even bring it up.’ By doing so, they’ve taken themselves hostage. Their counterpart has already won.”

    This not only applies to strangers, it also applies to the ones closest to us. If this column has taught us anything, it’s that our nearest and dearest sometimes are the ones who stand to make the most from our inattention, trust or unwillingness to let our voice be heard. Your boyfriend should pay close to the market rent for sharing your home. If $500 is the market rent, then he should pay that, especially that he is saving so much money. That does not include utilities. It’s not good to start a relationship by taking only a small percentage of financial responsibility.

    He’s thinking about his own narrow interests here. In addition to mortgage interest, you have maintenance expenses, utilities and property tax — and the latter three don’t go away when the mortgage is paid off. Susan Berry, a member of our Moneyologist Facebook Group, says he should pay one half of the market rent for sharing your apartment and half of the utilities. I commend her generosity of spirit, but believe he should pay the market rate for rent or half the mortgage, whichever is lower. In this case, the former. I just don’t believe you should subsidize him because you made good financial decisions.

    It’s smart to sign a cohabitation agreement.You need to make clear that your boyfriend’s rent (without quotation marks) is just that, and he is not contributing to your mortgage and maintenance of your property. This is an asset that you need to protect. Consulting an attorney might cost you a couple of hundred dollars now, but (a) it would cost you a lot more in the long term if you split up and he made a claim on your property and (b) you can split the legal costs, too, because in theory, it also protects him.

    Annette Simmons-Brown, another member of the Moneyologist Facebook Group, writes, “This is a great example of Boyfriend Math. What’s yours is mine and what’s mine is mine, and my gift to you is my personal awesomeness.” She says this issue comes up on “Judge Judy” quite a bit. (How many times has the voice-over guy said, “He says it was a loan, she says it was a gift.” Or in this case, it would be, “He says it was a mortgage payment, she says it was rent.”) Of course, it could just as easily be called Girlfriend Math, depending on the parties involved.

    There’s also a separate issue about the wisdom of paying off your mortgage when rates are still very low. Andrea Coombes wrote about this exact issue for MarketWatch. I encourage you to read the pros and cons of paying off your mortgage when you could, for instance, invest that money in the stock market. Of course, having paid off your mortgage you will have more free cash to do that too. Think carefully about taking out another joint mortgage with your boyfriend so soon after clearing this one.

    Am I coming down hard on your boyfriend? Yes, I am. The reason: Your boyfriend is either just plain cheeky or opportunistic to ask to stay there for free when you have paid so much money to make this happen. Still, it could always be a lot worse.

    Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyologist and please include the state where you live (no full names will be used).

    http://www.marketwatch.com/story/my...for-free-when-ive-paid-my-mortgage-2017-04-27
     
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  2. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    I agree with the rent advice but the advice not to pay off the mortgage when interest rates are no is poor

    Debt is slavery

    And seriously, don't get a joint mortgage with a non spouse ever.
     
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  3. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    yep, never, especially when this one seems to be hedging his bets already

    as you state, the corporate mantra never changes, at todays rates pay your mortgage off real slowly, etc etc.
     
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  4. Alton

    Alton Gold Member Gold Chaser

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    Cheeky? Opportunistic? Farkin' limp dick weasel methinks.

    Dear, we have this thing in America called a contract. It would be wise to learn how to use one.

    First point in the contract would be to deny said boytoy ANY claim or right, financially based or otherwise on the property and house that you have worked so arduously to secure by making accelerated payments on the mortgage.

    Second point you must carefully consider...if said boytoy is paying $1200/month rent now, is there really any reason that he can't continue paying the same sum to you for living in YOUR house? Whether you choose to make that rent payment "utilities included" or "utilities separate" is another detail you will need to consider.

    Let's be honest, you are NOT married to said boytoy. By the wording of your query I feel safe in assuming that marriage is, at this point, really not a viable consideration. Other than feeding the psychotic condition that humans call "love" is there any benefit or reason to have said boytoy sharing space under the same roof with you? Thinking like a woman here I would have to think that both his ability to financially provide PLUS the sex MUST BE awesome to consider such a situation. If not, best to keep boytoy at arm's length until AFTER you have paid off your house.

    If boytoy cannot handle these terms, well sweetie, time to find a real man.
     
  5. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Why would anyone make a financial commitment together with someone who is unwilling to make a marital commitment?
     
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  6. solarion

    solarion Gold Member Gold Chaser

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    Possibly because said partner may be fine contracting with their partner, but understandably uneasy with the notion of contracting with the state. Marriage should be a two party arrangement, but like everything else the state has to steal a seat at the table.

    Letting her dude live there for free post mortgage would surely be relationship seppuku, as that tension would surely come out somewhere. A better plan may be to split all the expenses before the mortgage is paid off. Then those payments can continue post mortgage, but they can put those funds into a bigger better joint home fund. That way everybody's contributing, she's presumably less raw about the equity she has in their current home, and they're working toward building a future together. As a bonus he doesn't have to feel like he's banging his landlord...though that is kind of hot now that I think about it.
     
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  7. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    The best solution is for the chick to get a new boyfriend who would appreciate her thriftiness. Hell, if she's hot and gives good head I would chat with her.
     
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  8. Usury

    Usury Gold Chaser Platinum Bling

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    She should just rent the room out to somebody else instead. Then problems solved. If they later buy another home together (I also agree bad idea if not married) she can keep this house and also rent the other room. This way she loses NOTHING, neither does he and they can still plan for future. Plus she'll have a fall-back place I'd be turns out to be a loser.
     
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  9. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    The guy is a loser looking for a free ride. He does not sound like a man, he sounds like a boy.
     
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  10. solarion

    solarion Gold Member Gold Chaser

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    Except then, they have to spend all their time at his place to get any privacy because...roommate. Then he can post here asking us how much he should be charging her for infesting his bathroom with feminine hygiene products...and we all know what totally selfish hogs women are when it comes to closet space. lol

    Didn't seem to me like currency flow was a huge problem for either of them, just avoiding tension in the relationship.
     
  11. TomD

    TomD It blowed up, y'all Platinum Bling

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    Live there free after the mortgage is paid? I don't have a mortgage but my house cost me far more than $1,000 per month in taxes, insurance (especially in coastal Florida), maintenance and depreciation.
     
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  12. Agavegirl1

    Agavegirl1 Silver Miner Site Supporter ++ Platinum Bling

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    Tax considerations: If the property is rented to a non-related party for fair rental value, she must claim the rent as taxable income. She will be able to deduct the "business" portion (based on square footage used for exclusive use by the tenant and part of the common areas) of mortgage interest, property taxes and depreciation of the property based on the residential real estate rules. At the point she sells the property, she can can exclude up to $250,000 of any gain as it is also her primary residence.

    In the event the property is sold for a gain of more than $250,000, the depreciation will need to be recaptured and taxes paid on it as a capital gain.

    And, IMHO, the guy is hedging his bets and probably expects her to pay for the bulk of the new condo with proceeds from the sale of the home, thus freeloading even further. He is not a partner worth keeping based on the request alone. Creep.
     
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  13. Oldmansmith

    Oldmansmith Midas Member Midas Member

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    Good to see you posting Tom. No, living is not free after the mortgage is paid, but I live in Taxachusetts hell and between property taxes and insurance I'm calculating $450 a month. Maintenance is mostly done by me and I see more appreciation than depreciation at least until the next crash.

    But no, her ass dragging boyfriend should not expect to live there for free after the mortgage is paid off.
     
    Last edited: May 10, 2017
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  14. Agavegirl1

    Agavegirl1 Silver Miner Site Supporter ++ Platinum Bling

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    I was prompted to calculate the cost of living in my lake house even though it has no mortgage. It came to $625 per month for property taxes, ulilities, insurance and routine maintenance. This does not include new tools, materials and equipment to do major repairs or replacements. Sure wish I could get the government out of my retirement plan.
     
  15. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    Half the nar
    What if rent is free but he pays all the food, utilities and maybe chores to equal the 500

    Still income? Probably barter income I guess
     
  16. Agavegirl1

    Agavegirl1 Silver Miner Site Supporter ++ Platinum Bling

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    If the value of the "other services", not food and utilities but chores, remodeling, maintenance etc are equal to fair rental value, then yes, it is a taxable exchange but those expenses are deductible so "net income" = fair rental value less value of services provided, less normal rental expenses including utilities paid by renter.
     
  17. ErrosionOfAccord

    ErrosionOfAccord #1 Global Warmer Gold Chaser Site Supporter ++

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    I would never allow a woman on my deed again, married or not. As mentioned above it must be qualified that the rent does not allow the SO any rights to the property.
     
  18. viking

    viking Silver Member Silver Miner

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    If he is fucking you well, you should be paying him.
     
  19. Montecristo

    Montecristo Silver Member Silver Miner

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    I'm assuming this guy would take over the "man's" work, no offense Agavegirl, of mowing hte lawn, shoveling snow, unclogging the toilet, fixing leaky faucets etc....
    What's the value of that? Or is she already getting that from him even though he doesn't live there? Maybe he's already doing it and he's figuring "since I'm already helping her take care of this house, I might as well live there"
    We really need to hear his side before calling him a cheapskate, opportunistic or a free loader. This type of question isn't fair when only hearing one side.
     
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  20. southfork

    southfork Mother Lode Found Mother Lode

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    She needs to have a rental agreement stating his renting gives no rights to any house profits , there was a case years back guy sued when they broke up and the woman had to pay him for supposed maintenance and his contributions. Bad idea all around . Then he gets pissed and reports her for not claiming rent on her taxes.
     
  21. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    Is ANYONE this STUPID ????????????
     
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  22. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    Should I charge my wife rent ? After 7 years the bj frequency has dropped and she's not willing to do a 3some.
     
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