What, if any, is an appropriate rent to charge your adult children, once they start earning money themselves is a thorny subject, fraught with problems. Some parents are horrified at the thought of asking their offspring for any money to cover their board, others feel it’s a necessary evil, and some feel it’s the right thing to do without question.
But how do you come to a mutual agreement, and where do you start in your research to even come up with a starting figure to begin some sort of negotiation? It’s a tricky one, that’s for sure.
- Consider the market rent: Research the current rental rates for similar properties in your area to get an idea of the average rental rate. Then, compare your property’s size, location, and amenities to those in your area to decide on a reasonable rental rate.
- Set clear expectations and terms: Discuss the terms of the rent with your adult children in advance, outlining the rent rate, utility charges, deposit requirements, and other pertinent details. Make sure the expectations and rules are reasonable and clear, so there is no confusion or disagreement later. It may all sound a bit too cold and calculating, but if the lines are blurred from the outset, and your son or daughter ends up living in your home for 5 years or more, whilst earning a healthy wage, it may be too late to backtrack.
- Consider the household expenses: If your children are sharing the common living areas, such as the kitchen and living room, consider the additional household expenses they may incur, such as electricity, water, and gas. You may want to consider splitting these expenses with them or factoring them into the rent rate. Young adults spend a lot of time online, surfing the net, gaming, and watching YouTube. They very often cook late-night snacks and also tend to do frequent washing. This all costs parents money!
- Consider their financial situation: If your children are starting out their careers, they may have limited financial resources. You may want to consider their financial situation when deciding on a reasonable rent rate. Be fair, but firm. Inevitably, they have got to live somewhere, and obviously, nobody wants to see their adult child out on the streets. But on the other hand, if they are earning a wage, they should contribute something to the family wallet, if only to prepare them for future responsibilities.
Remember, communication is key when it comes to discussing rent arrangements with your adult children. Be honest, and open, and work together to come up with a fair agreement that benefits both parties. Initially, they may feel aggrieved, that you should even think about charging them anything. But once you have had a calm discussion, and pointed out a few facts about financial life, they should appreciate things from your point of view.