College Grad Moving Home: Charge Rent or Not?

<p>First of all, from my mouth to God's ears: DS has an interview for an excellent job this coming week. Job is only half an hour from our home. We would all be thrilled if he gets this job.</p>

<p>I've offered for him to live at home, in our very wonderful basement apartment, and told him we'd charge him some modest rent -- less than market rate.</p>

<p>DH thinks we shouldn't charge him rent.</p>

<p>My motivation in charging something: He will value it more, will treat us more respectfully, won't take things for granted, won't regress to acting like a 16-year-old.</p>

<p>DH's motivation for not charging anything: "He's my son and I want him to save as much money as he can. This is still his home."</p>

<p>Comments? Opinions?</p>

<p>Compromise #1: Charge him the rent, put it into a savings account, and when he moves out to his own place, whenever that may be, return the money, with interest, to him. (But don't tell him ahead of time.)</p>

<p>Agree with mafool. I would charge him market rate. I would also limit the time he could stay home. I think it is good for kids to move out and live on their own. I have seen too many kids paying parents minimum room and board, therefore with unreasonable amount of disposable income for expensive car, clothes and spending money.</p>

<p>In my opinion...</p>

<p>Living in bedroom and helping out around the house for a relatively short period of time? This is still your home. No rent.</p>

<p>Given basement apartment all to himself and no real responsibilities beyond being respectful, no time schedule for leaving? I can see charging rent.</p>

<p>I would also encourage him to find a place on his own once he has some savings built up. You can also tell him it's rent-free for the first X months and then you'll be charging Y. I would also encourage you to put any of the rent money that's not used on his extra food and upkeep in a bank account for him. Otherwise you'd be making money off him, which is a little strange.</p>

<p>We charge modest rents to our college grads for a bedroom, not an apartment. The rent is modest, not market, so they can afford to save. They are welcome to eat with us at no extra cost. One is good at saving; the other gets threatened with eviction if we don't see continued evidence of saving.
It is our plan to return their $ when they need it to purchase a home or pay for a wedding, but only if we are financially able at that time, no promises.
We see it as a win-win situation: they get to live in a high priced area at low cost; we get someone to watch the house when we travel.</p>

<p>I have a good friend who lived home with parents after college. The parents would not take rent so she and her sister did the grocery shopping for the family and would not take payment.</p>

<p>HE might feel better if he's paying you rent. If he brings home an overnight friend, he can call you his landlady...much more status with peers. Some kids are a bit embarrassed to say they live at home, as if it represents a failure to launch. I notice college grads tell me, "I live with my folks again, BUTIPAYTHEMRENT!" </p>

<p>I agree that it's good to save it unbeknownst to him and give it to him on his way out, which satisfies your H's hope that he save the money. But in the meantime, he can represent to his peers that he, like them, is paying. </p>

<p>Just wondering...do you change any old rules now that he's a college grad? Does rent/not rent change that in any way? </p>

<p>Another advantage of taking in rent: if he wants to move at a future date, he can express that to you in terms of finances rather than hurting your feelings.
He might someday say, "I've decided to pay another $l00 monthly to share with a roommate, even though this has been great." That beats, "I'm moving out of here, sorry."</p>

<p>Here's a different idea, if you can swing it: As a grad present (or not), open up an IRA-Roth account for him. Then, have him put in $50. at least monthly into it. It will compound interest towards a retirement fund for himself someday. Call that his "rent" and Dad will understand he's saving even better this way.</p>

<p>No rules, just common adult courtesy, please.
We expect from them what we would expect from anyone we would share a house with, regardless of $. Let us know if you won't be home for dinner or the night, help with dinner clean up, grocery runs, airport runs, taking out trash.</p>

<p>No charge. I'm too happy for DD to be off my payroll.:D</p>

<p>I'm with husband. I don't charge rent to family, but every family feels differently about this stuff.</p>

<p>I didn't charge mine and they still all moved out as soon as they could.</p>

<p>It might vary with the child too. If mine were unemployed, playing music in the basement apartment and sleeping in, I would charge rent to get them to leave. But for a kid working hard, being helpful and fun to have around? I'd encourage him to stay until he can save up to buy a house.</p>

<p>Don't call it rent. That word's got a renter/landlord connotation to it that isn't too personal. How about suggesting they offer X amount per month to help with the food, utilities, etc.</p>

<p>Wow, in this housing market: All these references to "buying a house" (after they move out). Hmmm.</p>

<p>Well, we're not made of that kind of money. Nevertheless, depends on S or D's behavior, attitude, plans, and the reality of the family pocketbook. (Not to mention marital status or the lack thereof.)</p>

<p>When they were younger, I got more financial support for their care. That disappears even before 18, let alone after that. If it were a few months after college graduation, no cost to them, and no strings. If the stay were indefinite, OTOH, I would expect them to get some kind of a part-time job, because food costs definitely add up for each person in a household. Older D contributes labor whenever she's home (cooking, cleaning, shopping), but still the cash out for groceries is appreciable.</p>

<p>But I think the thrust of the question is more philosophical, and philosophically I would welcome a return home gratis, as long as plans for independence were being made & the parent's residence & lifestyle were respected. My father allowed me back home, gratis, when I needed a kick-start to my career & was without funds. He told me that's why in fact he was doing it: because he believed in me. The faith he verbalized and the practical shelter he provided did indeed get me started. I'd be happy to "give back" if I were, or am, in a position to do so.</p>

<p>I don't think right now there's any problems with <em>buying</em> a home -- assuming you have the appropriate qualifications to pay the mortgage. The problem is with <em>selling</em> a home -- and finding buyers with those appropriate qualifications.</p>

<p>As for the original question -- I would charge rent. The OP is offering an <em>apartment</em>, not the childhood bedroom. Either a portion, or all, of that rent could be returned to the fledgling as he flies the nest.</p>

<p>This is actually a great time to buy a first home, since there is no home to sell first and the prices haven't been this low in a long time.</p>

<p>My oldest moved back home after graduation instead of paying rent. He didn't ilke it at all. Felt he wasn't being independent enough unlike his friends who had all moved out. But he made the supreme sacrifice of living with us for a year and a half while saving the rent money. Together with that and the money he had put away from working, he put a down payment on a little fixer upper near us and now is one of the few kids his age to be a homeowner. He thinks the sacrifice was worth it and so do we.</p>

<p>I also totally agree that circumstances are different for every family. If we needed the money, or he needed the motivation, we would have done things differently.</p>

<p>I was reared in an ethnic culture which promotes generosity between and among relatives. People of my ethnic background consider it disrespectful for relatives to exchange money with one another. My ethnic culture also promotes independence and self-reliance, so relatives are loathe to remain/become dependent upon or to otherwise impose upon one another. Relatives (including parents and their adult children) who reside together either by choice or by necessity never exchange "rent" money, although household expenses and household chores are expected to be shared by adult relatives according to their ability to contribute.</p>

<p>I am inclined to agree with your husband's viewpoint that family is family, and family members who reside together in the same household should neither charge nor offer to pay "rent." I am also inclined to agree with your husband because, according to your post, your son did not ask you to allow him to move into your basement apartment; you extended that offer to him. </p>

<p>On the other hand, I would be inclined to agree with you if you already have a paying tenant residing in your basement apartment, and it would be a financial hardship for you to replace that paying tenant with a non-paying resident (your son). I would also be inclined to agree with you based upon the wording of your post: "He will value it more, will treat us more respectfully, won't take things for granted, won't regress to acting like a 16-year-old." If your adult son has a history of imposing upon you, treating you disrespectfully, taking things for granted, and regressing to teenage behavior whenever he is living with you, then charging him rent and/or setting a strict time limit on his residency in your household might be appropriate.</p>

<p>If you decide not to charge your son rent, I think it is appropriate for you to expect your son to share household expenses and chores. </p>

<p>If you intend to charge your son rent, and to save (or invest) the rent money for him, don't keep this a secret from him. Family secrets--especially with regard to money--tend to backfire at the worst possible times, and in the worst possible ways. Your son is an adult, and he is entitled to above-board conduct, so let your son know what you plan to do with the rent money he pays, and give him the opportunity to agree or disagree with your plan.</p>

<p>Timecruncher,
I understand your perspective, for the most part, and although my upbringing does supports multigenerational living, we choose to offer our children the option of living in our high cost area at a 'discounted' rate in order to save. This is more for their self-esteem than our pocketbook.</p>

<p>I do disagree with your last paragraph, however. Once their rent money is paid it becomes my money. If at some future time I intend to return that money, in full or in part, with or without interest, is my decision. If my circumstances should change, I would not want my prior intention to become a source of tension in my relationship. If I am able to return their rents, they will know where that money originated.</p>

<p>I think a college graduate with a job ought to live on his or her own if it is at all financially feasible. Part of being an adult is having independence, learning to manage real-world responsibilities. To me, that means not living in the same house as one's parents, even in their basement apartment. If your basement apartment is really a fully separate unit, meant to be a money-earner and it is legal in your neighborhood, then that is what it should be--but not so that one of your children can pay the rent on it. I don't see the point of having a close family member paying you money in this context. I would try very hard to keep the two issues separate--get a good tenant for the apartment and help your son find a safe and affordable place to live close to his new job.</p>

<p>To mominva: My Post #14 was a response to VeryHappy--and only to VeryHappy--within the context of suggestions offered to her by those who posted before me.</p>

<p>Since I did post above, I was clarifying my perspective in light of your comments.</p>

<p>If it were me I'd say no rent or board $$ for six months. That would give the kid the chance to build up a nest egg. Unlike years ago, the starting pay for the average grad these days is insufficient in most cases to really be financially self sufficient.</p>

<p>These are all very interesting -- and very different!! -- perspectives. I will share them with DH.</p>

<p>FYI: We don't currently have a tenant in the apartment, nor do we plan to get one. So if he were living there, we wouldn't be sacrificing rent from someone else. It's really the "nanny suite" where a nanny lived when my boys were little. Then for a while, it became an office for DH. It has a BR, LR, and bath, but no kitchen. Can be accessed through the main house, but also has a separate entrance from the outside. I just repainted (assuming we sell the house in three-to-five years), so it's really very nice.</p>