Giving friend discount on rent

LegacyUser

Hi everyone. I hope you can help me with a dilemma I have.

I am currently renting out a bedroom in my house to one of my close friends. Due to the pandemic that's going on, his salary was cut by a quarter. As I am lucky enough not to have been affected by it (for the time being), I was thinking of giving him a discount on the rent of a quarter of the amount as well.

I've no problem with the lower rent for now and he's a good friend so I think he'd do the same if it was me in that position and he could help me out. What's stopping me is that I am more than likely going to encounter a salary cut as well (hinted by management this week). If that happens (or worse, getting laid off), I would then be hit with reductions in income from two fronts (salary and rent).

At the moment he is paying a "mates rate" for rent and is lower than the market value and prior to this asked if I was sure with the amount as he was willing to pay more.

I don't know what to do if I give him the extra discount and then next month that discounted amount becomes more important to me for paying the mortgage, bills, repairs etc. I'm sure I could manage a few months at the lower rent amount, but what happens when I need to go back to the normal rate?

Am I asking for more trouble than it's worth? Would I be better off asking for the same rent and then giving him a cash gift or deposit some back into his account? I don't want to end up with the awkward situation telling my friend that I'm hiking the rent after giving him a discount, but at the same time would like to help him out.

Sorry for the ramble.

Dog day

Hi OP, it’s very noble & generous of you to want to give your friend a further dig out but the most sensible thing to do at the moment is wait to see if you do end up taking a reduction in salary yourself. Given management have already hinted at it this is highly likely.

Once you’re sure of your own finances & ability to pay the mortgage & bills then perhaps reassess how you may be able to marginally reduce the rent further for your friend. You’ve already rented to this pal at lower than market value & you do need to look out for yourself & your own financial responsibilities first.

I’m speaking from experience here. Good luck!

Tork

I think the less you say here, the better. Your friend is currently paying a low rent so in effect he is already enjoying a reduction on the normal market rate. He knows it too and I'm sure he's aware that if he was to move, he'd be paying more than he is now. You're just going to cause yourself no end of trouble if you start reducing rent, upping it, giving him cash gifts etc. That is more likely to cause problems between you than if you'd said nothing in the first place.

You are the one who has more at stake here. You've got to keep paying that mortgage every month no matter what happens and that's your number one priority here. My advice is to worry about the rent you're getting from your friend if he approaches you. He might not do this at all. FYI: I was renting a room in a friend's house when my wages took a bath back in 2009. It never even crossed my mind to look for a rent reduction. One thing I was grateful for though was a bit of flexibility when it came to paying rent and my share of the bills.

Xterminator

what you could do is tell him he still has to pay full rent, but at the end of the week/month you will give him a few bob back - to tide him over,

that way the going rate stays the going rate, and you can still be a good mate and help out.

SozBbz

I think you're over thinking this OP.

Has he actually asked or hinted even that he needs help? He may have savings etc and sure we all have no social life or holidays booked these days so we don't need the same level of disposable income. I've personally not spent about €2000 on holidays that I would have taken but had to cancel (one in March, one that would have been in May). Thats just on flights and accomodation, so if I factored in spending money, clothes I might have bought etc thats probably a lot more.

However if he does need help, then I think you'd be a great friend to help him out. Keep in mind that you could also take a mortgage holiday if necessary (i'm not suggesting you do this purely to accommodate your mate but its worth keeping in mind if your own circumstances change). Obviously a mortgage break is not free money, but it keeps cash in your pocket in the short term, and its all about cash flow right now.

If you do decide to help him out (if he needs it), why not put a clear timescale on the reduction say 2/3 months in line with the restrictions. As he's living in your home, hes a licensee not a tenant so you don't need to be too worried about setting a precident etc, but it never hurts to be clear with people, especially where money is concerned.

Pistachio19

Why even bring it up. If he comes to you asking for a reduction tell him you will think about it and make a decision then. But don't be the one to suggest it.

qwerty13

My take would be don’t change his agreed rent. As incredibly decent as you’re being, that could get very messy further down the line.

Could you casually - and very temporarily - ‘let him off’ a shared household grocery bill, or internet bill or something? Like as in ‘sure I’ll sub you for X bill this month’. And be very clear about the specific bill and amount you’re subbing him for. So there’s no long term commitment in that - as opposed to reducing his rent. Not say you should even sub him for any bills! But if you want to help him (which is brilliant of you) then I think it’s a cleaner way of saving him money than messing around with the rent.

I’d also make sure he knows that your workplace are talking about a pay reduction.

leggo

Honestly if I was in a position I could afford it fine, I’d be like “this month pay me X as a bit of relief.” Then maybe do that every second month. I’d be really cautious about making commitments to the lower rent because of your salary situation, because we don’t know how long this will last and also because if it becomes the norm down the line then increasing it back to normal rates would seem like, and could be taken as, a rent hike, even though it’s what you originally agreed. Letting him decrease the odd month toes the line between being a sound, supportive mate and not getting into anything that could turn messy later.

This could just be me but I’d be wary of giving him anything back at the end of the month or being seen to be giving him money, that’s almost like charity and people can be proud when it comes to money and always like to feel like they’re supporting themselves even in hard times. What if one month he’s waiting on his few quid back or anxious if he gets it and you can’t afford it? It’s just potentially messy. Whereas nobody is going to complain if it’s coming up to rent day and, now and then, you say “oh just give me €50 less this month I actually saved a bit not going out or doing anything”.