Am I being unfair?

All the different ways of solving the shelter problem. To be static or mobile? Roots, legs, or wheels?
TheRedHare
Posts: 202
Joined: Tue Dec 20, 2016 4:40 pm
Location: Atlanta, GA

Am I being unfair?

Post by TheRedHare »

So, if any of you had read my latest journal post you would have seen the entry where I was debating whether or not I was being fair with housing.

Here is the scenario/ my plan:
-Rent a house for 1700 a month
-House has 3 bedrooms and 2 bathrooms, with one bathroom being a private bath.
-The house is in a nice area within close proximity to the downtown area so the rent would normally be really high
-You can easily fit 4 individuals in the house.
-My plan was to simply live in the smallest room 11x8 and then sublease the other larger rooms for 650, 550 and 550 therefore covering the rent.
-So, yes, I would be essentially living rent free, but everything is in my name and I carry the burden if anything should happen.

The situation:
I get a message from the landlord saying:
"Hey man. So I've been thinking about your rental plan. And as much as I'm trying to keep your business and my business separate, I'd like you to consider changing your plan, as I'm worried that your business could become my business in the future, should you and your roommates start getting into disagreements. I'm aware that you haven't done anything like this before, but I can tell you from experience that having such an unequal payment of rent among roommates will absolutely cause issues because it is, frankly, unfair to them. For example: you're not just paying for the room where you sleep, but the living areas, the kitchen, the porch, the yard, etc. While I agree that it's a clever plan, I think that it will end with more headache than it's worth for you, and unwarranted headache for me. That said, I urge you to consider revising the rental split among you and your roommates to be one that everyone should consider "fair". Obviously, this is your decision, but I hope you reconsider."

My Response:
"Hm, I understand what you mean. This is something I had considered, however I looked at it as me being the one holding the burden, as everything is in my name. The rooms are below market rate, so in that respect everyone is getting a great deal. Most of these people have iffy credit and can't really get a decent place without living in a crappy apartment complex. Also the rooms are unequal in that some are larger than others, hence a larger price tag. It's also month to month so if they want to leave then that is fine, they aren't locked into anything like me. That being said, I will reconsider some things, but I make no guarantees. I hope this makes sense."

His response:
"I absolutely understand that and I can see your perspective, but I'll again caution that you living entirely for free while others are paying will cause friction that will ultimately turn into real problems. Just try to imagine what you would think if you found out that your roommate was living entirely for free on your dime. Again, it's your decision entirely, but I'd appreciate it if you asked around for advice."

My response:
"Again, I will reconsider. However, the same could be said with me paying for your mortgage and upkeep costs of the house. Lots of people do it, and no one has a problem with it. Hope this doesn't cause any tension between us."



What are ya'll's thoughts?

halfmoon
Posts: 697
Joined: Mon Nov 07, 2016 10:19 pm

Re: Am I being unfair?

Post by halfmoon »

My thoughts:

1. WTF?

2. Why does your landlord know what you plan to charge the other tenants? Have you been oversharing?

3. Why is it his concern? If he wanted to deal with the issues of renting rooms out to random marginal tenants, why isn't he doing so?

4. His nosiness and your concern for his unsolicited opinion may cause future issues.

5. WTF????

In your shoes, I would find another rental and proceed as planned. This is bizarre.

TheRedHare
Posts: 202
Joined: Tue Dec 20, 2016 4:40 pm
Location: Atlanta, GA

Re: Am I being unfair?

Post by TheRedHare »

Yea I know, so I'm not sure what to do. I've already made the payment although he hasn't cashed my check yet.
If there was another deal like this I would totally go for it, but it's pretty much a steal to stay there.
It's only 10mins from where I work and I like the community. This guy seems to be a pretty raging liberal/SJW so I'm guessing that's why he's doing all this.

One thing I was considering in order to get him off my ass and from any possible tenets that would probably soon figure out my free living, was to just pay for the houses utilities (which would probably be around 350-400).

What do you think? Tell this guy to get off my case, or just pay utilities to make them happy?

Did
Posts: 693
Joined: Mon Apr 01, 2013 7:50 am

Re: Am I being unfair?

Post by Did »

Yeah dude he is just a meddler. It is a legit plan. Stick with it, even if you have to go somewhere else.

I have shared costs, but I have also lived somewhere where one girl lived rent free. Just don't tell anyone, fool! (As Gandalf or Mr T would say).

TheRedHare
Posts: 202
Joined: Tue Dec 20, 2016 4:40 pm
Location: Atlanta, GA

Re: Am I being unfair?

Post by TheRedHare »

Did wrote:
Fri Jun 02, 2017 1:00 am
Yeah dude he is just a meddler. It is a legit plan. Stick with it, even if you have to go somewhere else.

I have shared costs, but I have also lived somewhere where one girl lived rent free. Just don't tell anyone, fool! (As Gandalf or Mr T would say).
Thanks, yeah I'll try to keep it on the DL. I guess if it came down to it, I would just tell them it's none of their business. And if they really have a problem with it they are more than welcome to leave, which they probably wouldn't because to get a room like the ones I'm renting, at that price, in that location are near impossible to find.

Did
Posts: 693
Joined: Mon Apr 01, 2013 7:50 am

Re: Am I being unfair?

Post by Did »

Yeah you can just say that it is confidential but it is the rooms being rented out rather than being a splitting arrangement with everyone on the lease.

JamesR
Posts: 947
Joined: Sun Apr 21, 2013 9:08 pm

Re: Am I being unfair?

Post by JamesR »

You just need to make sure that your agreement allows you to sublease (aka rent it out). So you become the "landlord" for the rooms, but you're the renter of the house.

It's also perfectly fine to rent different rooms at different rates by their sizes & advantages. Whatever you do, don't let the renters find out the rent that you're paying for the house, that's private information.

Ultimately you're the one responsible for collecting the rent from the renters, even if they didn't pay their rent to you, you would have to still pay for the house rent.

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: Am I being unfair?

Post by Dragline »

If you are on the hook for the whole rent, then its your business, not his. I would not waste time having any further discussions with him about it. If it comes up again, just say "thanks for you input" and then ignore it.

And the question is not whether you are being "fair". It's whether you can find roommates from your perspective and whether you are paying the rent every month from his. It would only not be fair to him if your plan did not work and you could not pay the rent for that reason. Maybe that's what he is really trying to say, though -- that he doesn't think your plan will work. Still, it is kind of a WTF conversation.

vexed87
Posts: 1521
Joined: Fri Feb 20, 2015 8:02 am
Location: Yorkshire, UK

Re: Am I being unfair?

Post by vexed87 »

Also, danger here if the landlord knows this much about your plans, he's in a good position to hike the rent at a later date, knowing you are covering the bills. You can bet your sub-tennents wont like a hike, so it might be you that eats that. Also, I wouldn't be going out of my way to tell your tennents how much or little your making on the deal, you are taking on significant risk here, and will be paying for empty rooms when they happen, so that shouldn't have any bearing on your relationship with tennets. If they get wind, and don't like the arrangement, show them the door.

diogenes dog
Posts: 3
Joined: Fri Dec 23, 2016 12:20 pm

Re: Am I being unfair?

Post by diogenes dog »

As a landlord, it would be a cold day in hell before i let a tenant sublet my property. I run my business, meaning I choose who the tenants are (based on objective criteria).

Nine times out of ten this situation is a mess waiting to happen. I think you have an inexperienced landlord.

Tyler9000
Posts: 1758
Joined: Fri Jun 01, 2012 11:45 pm

Re: Am I being unfair?

Post by Tyler9000 »

Setting aside the landlord issue for a moment, I'm not convinced intentionally subletting to people with poor credit while sticking them with the full bill for the rent is sustainable. A landlord can do that because they're adding value to the arrangement (the home). You're just a middle man, and have nothing to offer other than being easy to stick with the bill with no recourse.

But if you can make it work, more power to ya. I admire your creativity.

distracted_at_work
Posts: 202
Joined: Fri Jan 13, 2017 11:51 am

Re: Am I being unfair?

Post by distracted_at_work »

I like the thought of trying to live rent free but I'm concerned it's both unsustainable and unnecessarily risky. Roommates, especially the Craigslist, non-friend variety, are notoriously fickle in my experience. Friends are even tough They might pay you late, they might not pay you at all, they might take off one weekend leaving you on the hook. It will greatly depend on how you structure the agreements and the quality of people you find to live with you.

Hindsight's 20/20 but you probably overshared what your plan to charge the tenants were. I think your landlord has a legitimate point that this will cause friction and could turn into his headache. If I was a landlord, I would not want my tenant doing this. Find another house and don't tell the landlord?

Another consideration. Imagine you have empty room(s) over the course of your lease. If you end up carrying the costs of those rooms for x number of months does it still make sense to do? Where's the cutoff compared to renting your own room or apartment? For example, your initial cost when you move in. I assume the first month and damage deposit will be $1700 x 2 and you will not be able to subsidize that.

Lots to think about. I hope you pull it off.

Spartan_Warrior
Posts: 1659
Joined: Fri Dec 02, 2011 1:24 am

Re: Am I being unfair?

Post by Spartan_Warrior »

I was shaking my head at the irony of a landlord moralizing about other people subsidizing one's housing costs. At least you called him on it.

That obviously isn't his real concern. He's worried about the potential for drama that could cause either damage to his property or delays in his rent payments. If your aim is to convince him this is a good idea, focus your arguments along alleviating those underlying concerns. But, I'm not sure you should be trying to convince him...

First off, CAN you pay the rent without the roommates or is the rent unreasonable without this scheme? Is this just a way to reduce your costs and accelerate FIRE, or is it actually the only way you can afford the apartment? What happens in the case of temporary vacancies?

Also, you said there were 3 bedrooms, but you're planning to have 4 people living there. How is that going to work? Are you sleeping in the living room or something? Are there potential liabilities (for you or the landlord) as a result of sleeping in a "non-legal" bedroom and/or exceeding the house's occupancy? Insurance liabilities, for instance? In a fire, is there a window or egress point? May seem silly, but the devil's in the details.

For the record, I actually don't think it's a fair split, and I also could see it blowing up in your face if you hide it and your roommates later find out. It seems like it MIGHT be fair if they knew in advance that they would essentially be paying your way, but then, I can't really imagine a palatable way of disclosing that fact that would actually go over well... And if you can't tell someone the real story, that only seems to confirm that it's not really a fair situation to them.

Not only that, but how are you structuring the agreement to protect yourself? Is it even possible to do so? Are you getting one month's rent as safety deposits from the roommates, etc? What happens when Craigslist stranger roommate trashes the place? What recourse do you have? Even for the homeowner, dealing with a renter whose name is on the lease, it can be difficult to remove problem tenants. How hard would it be for you? Depending on the answers to these questions, the "risk" on your side may be more than you estimated and not worth the potential gain, regardless of the morality of it.

So yeah, I don't think it's fair for pretty much anyone involved.

If you really want to lower your rent with the assistance of roommates, the "fairest" thing is probably to put the roommates on the rental agreement, take the smallest legal bedroom, contribute proportionately toward the bill (taking somewhat into account room size/bathroom access differences), and split utility bills evenly. But that's just me. I've only had friends as roommates in the past, so that may be coloring my perception. At this point in my life I doubt I'd ever do a roommate arrangement, period. It's not worth it to me.

TheRedHare
Posts: 202
Joined: Tue Dec 20, 2016 4:40 pm
Location: Atlanta, GA

Re: Am I being unfair?

Post by TheRedHare »

So I think I'm just going to structure it like so:
550 for large room with private bath.
450 for both the medium/large rooms with shared bath
250 for my portion
All utilities are split even

It's near impossible to get rent like this in a place like the one I have. So this will make everyone want to stay, thus wanting to make sure I'm happy and rent is paid on time. I figured it would be better to be mostly transparent with people because they would more than likely find out.

bryan
Posts: 1061
Joined: Sat Nov 29, 2014 2:01 am
Location: mostly Bay Area

Re: Am I being unfair?

Post by bryan »

Plenty of folks renting a room know that doing so pays for (or subsidizes) the master tenant's rent or the landlords mortgage. People also expect "fairness." It's up to you to find the balance and right approach.

The strange thing to me is your landlord. It's like he "wants to provide some cheap housing" but he got foiled by a more greedy rentier. ¯\_(ツ)_/¯ He will probably learn a lesson.

James_0011
Posts: 392
Joined: Wed Nov 09, 2016 12:00 am

Re: Am I being unfair?

Post by James_0011 »

How would your tenants even find out? In any case, who cares? In downtown Atlanta the rooms should fill up fast, they can move if they don't like it.

halfmoon
Posts: 697
Joined: Mon Nov 07, 2016 10:19 pm

Re: Am I being unfair?

Post by halfmoon »

Possibly flogging a dead horse, but I continue to be mystified by this moral dilemma and many of the comments. Why does a subjective concept of fairness apply? This is a commercial transaction, not a college buddy arrangement. On one hand, I hear arguments that it will be detrimental to the OP (ultimate responsibility for the original rent and utilities, potential vacancies, inconvenience and mental agony), but on the other hand it's not "fair" to charge more than the OP's actual cost (actual under ideal circumstances, with no vacancies or delinquencies). Really?

As I asked in the other post: what if the OP were to buy a house and rent out rooms? Is he morally obligated to only charge a prorated portion of his actual ownership costs (minus the FMV of his own room) for rent? What if he rents a house at a ridiculously high price and then tries to equitably divide the cost between himself and his sub-renters? Think he'll have any takers? Are they obligated to overpay to be "fair" to him?

What if he were to buy flowers wholesale, divide them into various-sized bouquets and sell them? How about if he buys a car on Craigslist, then sells off the parts? I could go on all day.

@Tyler, I disagree that the OP isn't offering any added value to his renters. I can't answer for other places, but Seattle Craigslist has literally hundreds of ads seeking rooms for rent. Most of those posting ads don't have adequate credit, rental history and/or resources to rent an entire house or apartment, especially with first/last/deposit up front. Many don't want to tie themselves to a 1-year lease or have some blemish on their record. I'd bet that approximately zero of them are concerned with how much rent their landlord is paying to another landlord. They just want to know what it will cost them. If someone is charging rent that's above market value, no one will take them up on it. Period.

The added value offered by the OP? His money in the bank, good credit, financial acumen and appetite for risk. The guy who owns the house is trying to have it both ways: the convenience and security of renting to one person, while keeping the moral high ground. As a landlord, I call BS.

bryan
Posts: 1061
Joined: Sat Nov 29, 2014 2:01 am
Location: mostly Bay Area

Re: Am I being unfair?

Post by bryan »

I call BS on landlord as well (but it's beside the point). The ball is in TheRedHare's court and ta is asking about "being unfair." It's a common thing that comes up in all sorts of situations and many differing opinions of what that even means and motivations/incentives involved.

Related satire a friend of mine in SF was involved in making: https://www.youtube.com/watch?v=r2ybupRgffE (wth, why so many downvotes? hilariously on point. Guess people really are incredibly stupid.)

halfmoon
Posts: 697
Joined: Mon Nov 07, 2016 10:19 pm

Re: Am I being unfair?

Post by halfmoon »

@bryan, the Equitable video was a hoot. Sad that so many commenters didn't recognize the satire or appreciate the underlying point.

@TheRedHare: just to clarify, I don't think fairness is an issue here. That doesn't mean I automatically think it will turn out well. As others have pointed out, you need to factor in the potential vacancy/delinquency/damage factors and decide for yourself.

thrifty++
Posts: 1171
Joined: Sat May 23, 2015 3:46 pm

Re: Am I being unfair?

Post by thrifty++ »

Totally agree with all of halfmoons comments and this is such a WTF situation.

First off, your conversation with the landlord is totally WTF bizarre. And really awkward. I dont know why you ever told him in the first place. Its none of his business. I wouldnt have thought you are sub-letting the place. I would have just thought they are room-mates. Most rental agreements allow a number of room-mates. If the landlord responds again I would just shut the conversation down by saying something like, thank you for your comments I will take them into consideration. Full stop.

I think that there is lots of social stigma and social norms clouding the issue of whether what you are doing is objectively fair or not. I think this must come possibly from a tradition of people sharing equally in rental costs. But that is in the situation where a group of people get together, all go on the lease, all pay an equal portion of the letting fee, and of the bond, and contribute shared furniture etc, pay equal share of vacant rooms. While that has traditionally been how shared flatting works in your case it is not. You are paying all the letting fee, you are paying all the bond, you are paying all the rent for any unoccupied room until occupied, presumably you are furnishing it, you are liable for the whole rent, any damage etc. You also are securing the place based on your credentials and your eye for a good deal. There is nothing unfair about it whatsoever.

It has been very common for people who own property to fill rooms with people who pay their mortgage and no one has ever cast any claims as to the unfairness of their actions. As halfmoon said people dont go around insisting that such people should only charge tenants a fraction of the interest costs on the mortgage. Hell no, they are getting the principal paid off their mortgage bigtime. Its purely social convention that this is regarded as acceptable. So why should you be forced to take all the risk and receive no gain just because you cant afford to buy property? Your actions are completely consistent with the capitalist based society in which we live and absolutely fair. If this is unfair then everything about the society we live in is unfair. But that is a much bigger philosophical issue and people will hold different views on that. But people who actively engage and benefit from our free market system have zero rational grounds to question your morals on this issue.

It does appear like you have told the landlord far too much information that is none of his business and is creating an awkward situation. I think this could spoil your plan to make a success out of it. I agree with halfmoon that maybe ditch this property and look to replicate this plan elsewhere. I dont know whether it will now be too late for you though.
Last edited by thrifty++ on Fri Jun 02, 2017 9:01 pm, edited 1 time in total.

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