ok i occasionally read this q and a column called the moneyist and this popped up
Now I have some back story in this type of situation …as when we were in a pinch and in a house mom wouldn’t give up she decided to rent the rooms out and it worked so well as we made rent and paid the utilities …
when the first set of roommates came and went she upped what she was charging for the 2nd and between the money we did get and what she charged we became pretty well off but at no time did she ever tell anyone renting from us what our original rent or utilities was
If everybody involved (including Uncle Sam) knew what the facts of the situation were, then I don’t think it’s intrinsically immoral to rent a three-bedroom apartment for $1500/month and make bank on the deal by recruiting two roommates to occupy the other two bedrooms at $800/month each. If the roommates are happy with that arrangement, and they think the rooms they occupy are worth $800 per month, then you’re not scamming them.
But if your roommates aren’t aware that you’re charging them extra to cover your own share of the rent, then I think that’s exploitative.
Like so many things, it’s something that’s okay to do with people who knowingly consent to it but not so okay if you’re deceiving them for your own advantage.
Sure, but you know that the builder of your house built the house to make money by selling it for the highest price he could get. That’s not a deceitful transaction.
Roommates, on the other hand, typically operate on the assumption that they are dividing the basic living expenses equally (with perhaps some negotiated adjustments depending on who gets the bigger bedroom or whatever). If the letter-writer in question was letting his roommates believe that that was the situation in their case, he was being deceitful.
If somebody I knew offered to sublet me a room in their apartment for price X, I wouldn’t necessarily infer anything from that about what they were paying in rent. (In fact, people in my area sometimes temporarily rent out their entire houses for rents that are higher than the home ownership costs, so they’re making money on the deal, and there’s nothing underhanded about it.)
But if somebody said they were looking for a roommate to share the rent in their apartment, then that would sound to me as though they were expecting to split the rent more or less equally. I would certainly ask to see the lease to get the facts before agreeing to the deal, but my initial expectation about the deal would be that it involved equitable rent-splitting.
And if somebody deliberately said or implied that they were offering an equitable rent-splitting arrangement while they were actually making money off me and my other roommate unwittingly paying the entire amount of the rent, then of course they’re flat-out lying and cheating.
Again, it all depends on what the people involved knew and when they knew it. But I can’t tell from the letter in question exactly who knew what when in this situation. The columnist answering the letter may have had more information than we do, because letters to advice columns are often edited for length and sometimes important facts get lost.
The text of the columnist’s response in the OP’s linked article suggests that that hasn’t been clearly established:
But the columnist apparently thinks it has been established that the “roommates”/subletters were not aware of the imbalance in the situation:
I have to agree that the position “What I’m doing is perfectly fine as long as I keep getting away with it without being found out” is usually not a good indicator of ethical practice.
But as I said, I personally can’t clearly tell from the letter who knew what when in this situation.
I have a dumpster at work. I pay a certain amount to have it emptied weekly. I’ve had people offer me cash to put things in my dumpster and sometimes that means I come out ahead. Meh, I don’t see a problem.
Well, if the “things” include something like a dead body that might become your problem… but I’m assuming you have some notion as to whether the items they’re paying you to dispose of are OK or not.
Nothing wrong in dodging taxes, either then, I gather? Because that seems to be what the writer did.
The writer also says he earned $100/month from the situation, but he’s wrong … if fair market value for his room was $500/month and he was getting free rent, he benefited to the tune of $600/month.
Having said all that … yes, the answer does seem a bit on the sanctimonious side. I see nothing wrong with the arrangement as long as it is permitted by the lease, subletters know that the writer is taking a cut (doesn’t even really matter if they know the amount, as long as they understand the nature of the arrangement) and taxes are properly paid.
Yes, it seems a little greedy of the writer, and it’s not something I’d personally feel comfortable doing, nor would I likely want to have such a person as my close friend. But as long as it’s clearly both legal and transparent (which the Moneyist seems to think it wasn’t), I don’t think it’s wrong.
Do the purchasers of your “trash offsets,” if you will, come to you, or do you “do the legwork” and go out and recruit them? If the former, I don’t see a problem either.
Someone upthread mentioned that there’s nothing [inherently] immoral about being a middleman. That’s a defensible assertion. Setting out to be a secret middleman strikes me as being a different matter.
This is how I made it through college. I had a large legal settlement coming out of college and used it to get a mortgage. I then had roommates pay my mortgage through college. I paid taxes on the whole thing but between depreciation and the mortgage payment I basically never made money. I did have a roommate get made when I told him I wasn’t paying rent but considering I’d put 30k down to get him a house I figured we were more than square.
Neighbors/clients/acquaintances sporadically approach me, “hey, can I throw some stuff in your dumpster, I’m doing spring cleaning?” while proffering a twenty. That kinda thing
I suspected as much. Yeah, you don’t seem to be crossing any ethical lines. But that’s such a different situation than was outlined for the Moneyist that it seems to be a wholly different discussion.
Around 2011 I had an employee that was down and out and living in a shelter. He was a nice guy and a great worker. I lived in a two bedroom apartment in St Louis that I rented way below market value; I did all the maintenance for the landlord and had been there for a few years.
I offered the employee a place to stay for a while, rent/utilities free, until he could get a place of his own. We got along well and things were getting better for him. Three months into this I took a much better job and got him hired at the same place(different department).
I knew what he made at the new place so I had a discussion with him about our living agreement. We came up with a “livable” all inclusive rent amount for him to pay me. We also scheduled in periodic COL adjustments. He never knew what I paid for rent or utilities. In the end of our time at that apartment (April 2021) he was paying 375 a month, all inclusive, including cable and internet.
I got another better job 90 miles north…he went to CDL school and is driving long haul OTR. Our new agreement for a much nicer, larger place has since been renegotiated. The bonus for me is I get 3 weeks every month w/o a roommate but he still pays 45% of rent and utilities.
I did tell the first landlord I had a roommate, I did NOT tell uncle sam… Why should I?? I didn’t “gain” anything except a good friend.
Well, dodging taxes is illegal. But ignoring the tax implications of the extra income for the writer as well as his lease’s rules on subletting…
Fair market value for the room was $600/month. The Landlord either did not capitalize on it or the market value was $500 when the writer locked into the lease and then increased (as markets sometimes do).
Even if the writers friends know that the writer is only playing $500, so what?
Is $600 a month still a good deal for the friends?
Can they find a better deal somewhere else?
Why is there any presumption that the writer’s deal should carry over to the friends?
Are we in disagreement here? I said in my post, “I don’t think it’s wrong” - as long as the writer’s lease doesn’t prohibit subletting, he pays his taxes, and his roommates know that he is taking a cut (as I said, I don’t even think it matters if they know how much).