How to be an ethical landlord?
June 20, 2012 9:48 AM Subscribe
I am buying my first house and my friends will live there with me. What is the ethical way to decide what to charge in rent?
posted by Galaxor Nebulon to Work & Money (38 answers total) 2 users marked this as a favorite
Okay, so my plan is to estimate the average annual cost of major and minor maintenance and divide by twelve. I'm okay with that; that's my friends paying for wear-and-tear while they live with me.
I also plan to do an estimate of the average monthly utility bills and charge that. We will close the books once a year and figure out if we went over or under on the utility bills, and charge or credit them.
But the big question is: I'll be paying approximately $1,000 a month on the mortgage (incl. taxes and insurance and all that). I could pay it all myself, and it'd only hurt a little in the wallet. I could charge my friends some amount of rent in order to help defray this cost. But how much?
We could split the mortgage bill equally, but that seems a little unethical to me. I get to keep the house after they move out. Why should they buy me a house?
I've heard about one idea where you pay your rent in "hours" instead of dollars. We all make different hourly wages and there is no defensible reason for that, so we could pay into the mortgage in proportion with the ratio of our incomes, to offset the inherent unfairness of capitalism. But still... why should they pay the mortgage when I am keeping the house?
Probably the most ethical thing to do would be to form a nonprofit corporation to buy the house off of me, and then we all pay into the coffers of the corporation and we all become board members, and then no one of us owns the house. A co-op. I might do that at some point.
But let's say I don't do that. How should I figure out an ethical amount for them to contribute to the mortgage?