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Old 12-14-13, 11:30 PM   #1
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How do I determine a fair rent amount for a family member?

My brother is an electrician in Wisconsin. He's been unemployed for the last 1.5 months, and the union won't have more work for him until possibly March. If he hadn't just built a new 2-car garage, he'd have plenty of savings and it wouldn't be a problem. The union suggested that there might be work in other areas of the US if he were willing to travel. He checked the local down here, and sure enough, they have plenty of work. So he's on his way. He could be here until some time in March, but it could be as long as late Spring/early Summer before he is needed back in Wisco.

If you remember from a previous post, my wife and I bought a house this fall, and it has WAY more room than we need, so of course we said he could stay with us. We'll set him up in the 2nd bedroom, and he will have near-exclusive access to the 2nd bathroom. I've even made room in the garage for his car, and will have bike parking for him, too. He has already offered to do needed electrical repairs around the house as part of his 'rent'. Neither of us wants to make it a true landlord/tenant relationship, as we don't want to risk souring our familial relationship. At the same time, neither one wants to feel like we're taking advantage of the other.

I'm willing to play it by ear. We know our electric usage will go up a bit, which will mean a higher bill. Our water usage will go up, but the bill should remain the same (when we were watering our lawn daily during the summer, our bill only went up $10). Our gas bill might go up a bit, due to heating more water for showers, etc. The only other 'shared utility' we'll have is internet, and I'm not going to quibble over his bandwidth usage. Hell, we've got a spare FreedomPop hotspot with quite a bit of bandwidth available that he can use if it becomes an issue.

I understand that he's doing this to support his family, and that the vast majority of his income will be sent back home, but at the same time, we're losing the use of a room and a bathroom. But I'm gaining access to NFL Sunday Ticket and HBO GO (he has DirecTV).

If you were in my situation, what would you do?
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Old 12-14-13, 11:34 PM   #2
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You could just figure out what the added expenses are and have him pay you for that. You could just do a rough back of the envelope calculation. That way you aren't making any money from your brother but also you aren't out of pocket for the added expenses.
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Old 12-14-13, 11:49 PM   #3
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Well, obviously, he pays his share of the bills. Since there are 3 of you, he pays 1/3.

Space wise, calculate the square footage of the house and the payments or rent... Divide square footage by costs. He pays 100% for the costs of his room. He pays 1/3 of the costs of common areas. I've used this system to come up with rents for roommates and it worked well. You are not charging a premium to make a profit, so he's getting a good deal.
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Old 12-15-13, 01:04 AM   #4
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Well, since my brother is living in my house and not paying rent, I think I have an idea. You had the space. You didn't plan on renting it out. You don't NEED the money. He needs to be there to help out his family. You have a couple of options. 1. Do what Artkansas says. It is fair. 2. Find out what an efficiency in your area cost, that is what he would do if he wasn't with you. 3. He is family. It is free or mostly free.. Maybe token rent.
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Old 12-15-13, 01:47 AM   #5
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What Arkansas proposed seems fair. Issue with rent free and token rent is that there is a high chance of feeling of being used creeping in. Which is what you mentioned in your post also.

You said there might be need some electrical work done. Get three quotes for it to get an idea of cost, then you can factor it in to how much rent you are charging.
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Old 12-15-13, 01:47 AM   #6
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Personalty I'd make it somewhat of a landlord / tenant relationship and I'd get his electrical / handyman responsibilities in writing or well understood so there won't be misgivings on your part as to what you're getting out of this for your hospitality. I'd also be clear as to the housekeeping rules he's responsible to follow because these things can turn south from lack of mutual understanding.

I'm not really much of a roommate tolerating person in my older age but I have extended the loan of a room to someone during hard times in their lives on two occasions. (soft touch for a sob story) And that was pretty hard on me while they both lasted.

It's not easy being all landlordy to a well liked friend or relative but it might just turn that way anyway so I'd just start out that way so there won't be misunderstandings.
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Old 12-15-13, 02:54 AM   #7
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if it were my brother, i wouldn't charge him any fixed rate, and he would gladly pay in other ways: dinners, groceries, cooking chores, home repair, beers, lift tickets, fight club, etc.

but i'm the older brother and was taught to be his keeper (even though we're not as close as i'd like). my big sis put me up for a couple months after college, so it's probably owed.
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Old 12-15-13, 03:33 AM   #8
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if it were my brother, i wouldn't charge him any fixed rate, and he would gladly pay in other ways: dinners, groceries, cooking chores, home repair, beers, lift tickets, fight club, etc.

but i'm the older brother and was taught to be his keeper (even though we're not as close as i'd like). my big sis put me up for a couple months after college, so it's probably owed.
I think the key difference here is that the brother would already have work. So asking him to pull his weight financially is actually recognizing his value and reaffirming his competence and independence. Then you can share beer, dinners and lift tickets as equals. If he were jobless, then it's compassionate to help him as you suggested.
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Old 12-15-13, 05:17 AM   #9
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If you were in my situation, what would you do?
I would let him stay for a token amount if it were me(maybe $300 month), and ask him to check out the electric system and do whatever he sees needs doing (with you buying the hardware). He's not a deadbeat, and it's likely the situation won't last too long. Someday, you might need a little help from him, and it won't really cost you anything to help him out now.
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Old 12-15-13, 10:21 AM   #10
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he's family in need of help. he stays for free. how is that even a question?

he'll help out by doing chores and paying for groceries and little things here and there. maybe ask him to chip in a electric once in a while on a particularly heavy usage month.
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Old 12-15-13, 10:26 AM   #11
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He is earning $$$, so 1/3 of expenses.
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Old 12-16-13, 12:57 PM   #12
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Thanks for the input.

Some past history:

When I moved to Dallas in 1989, he had a 1 br/1 bath apartment that we shared until his lease was up. I slept on a futon behind the couch for 8 months before we moved to a 2 br/1 bath apartment. I had a job here, so we split everything 50/50.

He's willing to purchase a bed and leave it as partial compensation, in addition to the electrical/other work he'd do around the house.

He actually arrived this morning at 6:30. We showed him around, then he used the bathroom, asked for the wifi password, and looked up the best route to the Union hall. The only things he'd unpacked at that point were the perishables from his cooler. Then he headed to the Union hall so that he'd be first in line when they opened at 8am. So he's serious about working.

I'm sure we'll talk tonight over dinner about things. I know he keeps a tidy house at home, we'll just have to set up a good split of chores/responsibilities for when he's here. I'm sure he'll do his own laundry, and I have no problem with us co-mingling our laundry, if necessary. Other than food costs, I'm thinking that our expenses won't go up all that much, and something nominal, say $50 to $100/month, adjusted by repair work around the house, would be fair/sufficient. But even that feels kinda odd, considering they've never asked for any sort of compensation when we've stayed with them on our various visits to Wisco. Of course, those were 2-5 day visits, not 3-6 month visits.

Oh, and his wife and daughter will be coming down to spend Christmas with us. Should make for a fun time in the house, since we have next to no furniture.
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Old 12-16-13, 01:38 PM   #13
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Just sneak into his room at night using the spare key and rifle through his wallet, taking what you think is fair. Siphon gas from his truck. And when he asks about rent, tell him no worries.
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Old 12-16-13, 02:03 PM   #14
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As long as he continues to pursue income and send it back to his family, give him all the grace you can, but have clear boundaries and expectations. As for the amount to charge him, ballpark your monthly utilities and food, add 50% and that's his monthly cost, fixed, for the specific number of months until he is expected to be employed at his regular job again. That way he pays about 1/3, it's always the same amount and no room for arguments because he will be responsible and you are giving to help. Keep it simple, somewhat even, and just be a blessing to him and his family. Forget the small stuff.
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Old 12-16-13, 02:07 PM   #15
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he's family in need of help. he stays for free. how is that even a question?

he'll help out by doing chores and paying for groceries and little things here and there. maybe ask him to chip in a electric once in a while on a particularly heavy usage month.
Ya, that's even better, assuming you don't have any problem with that. And reading through the thread, sounds like it will be a peaceful co-existence and a nice Christmas.
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Old 12-16-13, 03:02 PM   #16
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Then he headed to the Union hall so that he'd be first in line when they opened at 8am. So he's serious about working.
That's a good sign right there. Sounds like this one will go well.
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Old 12-16-13, 03:38 PM   #17
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Went home for lunch. He'd been back from the Union hall long enough to have unloaded the car (he brought 2 Gary Fischer's with him, one road, one MTB). He has to go back tomorrow, as he just missed the cut for a job call today by 4 people. Because of the way things work at this local, he's pretty much guaranteed to be selected tomorrow. The job starts Saturday, and is a 7-day/week, 10-hour per day job that lasts until early/mid January. So he'll get a few more days to unwind from the trip & acclimate to Texas before having to work.
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Old 12-16-13, 03:42 PM   #18
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Awesome. Glad you are in a position to help him out. If it would not bruise his feelings, I would comp the rent, let him help with a fair portion of bills. Heck maybe let that ride for a month or two to see how much they go up.

Maybe show him this clip.

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Old 12-16-13, 03:50 PM   #19
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Charge him no rent at all.

Accept the extra new bed. Figure out any and all electric projects you want him to do. Tell him he is responsible for one thing and one thing only: keeping the beer fridge stocked. Or making sure the coffee doesn't run out. Something like that.

And leave it at that. Next time you need a favor from him, you probably won't want to pay rent...
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Old 12-16-13, 04:03 PM   #20
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There's been some good suggestions here. Has he mentioned what he thinks is fair? Or what he wants to pay? He may be thinking of paying more than you think.
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Old 12-16-13, 04:07 PM   #21
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I agree with the suggestions to just let him do some projects around the house and kick in for groceries and some dinners out, etc. Dividing the house expenses into thirds makes sense for people going into a rental together, but in this case you and your wife already have the extra space and it won't cost you much at all in extra utility bills. Meanwhile he's going to be paying to support his family back home and the cost of that household won't be reduced much just because he's not there for a few months.
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Old 12-16-13, 05:01 PM   #22
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Don't charge your brother rent. Maybe one day it will be you asking your brother for a favor and he won't charge you either.
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Old 12-16-13, 05:09 PM   #23
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Don't charge your brother rent. Maybe one day it will be you asking your brother for a favor and he won't charge you either.
I agree and if your ever in need of a kidney, your golden!
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Old 12-16-13, 05:38 PM   #24
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Well, I agree with many here. Don't charge him anything. After all, he is your Brother. What would you do if your parents came to be with you for several months? Charge them.....I don't think so.
He will help out with things, I'm sure and the extra cost for utilities will be minimal.

Enjoy your time with him.
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Old 12-16-13, 05:50 PM   #25
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He's your brother, tell nim to pay what he feels he can.
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