Renting half house to 2 friends (a couple)

[Mike Texter]

Hi, i just bought a 1350 sq.ft. house 3 Bed, 2 Bath, and 2 friends (who are married) and i just moved in yesterday. We negotiated briefly on rent amount before i caved and said their initial offer of 300 per month plus their share of utilities would be fine. My gut feeling is that i should have asked for more, but they being my friends, I felt like it would make things awkward.

The house is right in the suburbs of Grand Rapids, MI, and close to just about everything. They have 2 dogs, but by far the smallest bedroom in the house, as well as their own bathroom. I am paying about 875 a month for the mortgage plus insurance and taxes. Utilities are yet to be determined, but i'd estimate around 200 a month for those altogether (cable, internet, trash, electricity, water, gas).

I just want to make sure i'm not being taken advantage of. Any tips would be great :) (the consensus among my co-workers is that i'm being shafted.)

[Eric Black]

Hi Mike,

Congratulations on your new purchase.

Look on Craigslist and in any other local newspapers or websites to see what other people are charging in your area to rent a bedroom. Try to find the closest comps as far as room size, utility responsibility, etc. Then go from that. If everyone else is renting out a bedroom for $500 per month +utilities then you're losing. If they are renting for $400 including utilities then you're probably right on par. You also have to take into account the dogs. Many places that do allow dogs either get a larger deposit (which you may have done), or they charge extra per month for the pets. Some cities/states don't allow you to charge extra monthly rent for a pet though so be sure to check your local laws.

Either way, $300 a month sounds like a great deal to me....for your friends.

Good luck and don't let yourself be taken advantage of if you find market rents are higher than what you're getting. True friends don't try to rip you off.

Eric