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Prepayed Rent Situation

Posted by ceregon Dec 1 '08, 09:37

Last year, I needed extra cash in January for an investment project and my roommate paid 11 months rent in advance and I gave him December for free.

This year, I have no need for cash (other than to stockpile for when I finally start buying stuff), but he wants to prepay again. By doing so, he wipes out his savings account, so that when he files for financial aid, he doesn't have much money saved up, so he'll get more aid money.

Since I have no pressing use for cash (except for paying down my 6% mortgage, which is worth only 4.5% after tax), I'm not sure I want to do this again. I could see doing it for a half-month free, which would be around 4% discount for him.

He's a good roommate, quiet, studies a lot, and my dog likes him. He's finishing up his 2nd year at a community college and will be transfering to nearby 4 year school to finish his bachelor's degree.

Any thoughts? Have other people done transactions like this?

Responses:

If someone wants to pay rent for a certain time up front it shouldn't matter to you why. - lileve Dec 1, 10:08
I would do it as well. if you don't, you might risk offending him. -- nm - santa claus loves mandy lane Dec 1, 09:57
i'd feel a little weird about helping him screw the system, plus he's asking for another month free this year. -- nm - kare Dec 1, 09:57 1
- (oh, sorry. i guess he's not asking for a full month.) -- nm - kare Dec 1, 10:10
I don't see the downside -- nm - con_carne Dec 1, 09:53
You have to pay the whole year in advance? -- nm - Guigue Dec 1, 09:50
sounds like win-win to me. -- nm - loosilu in Algiers Dec 1, 09:45
wouldn't paying down a mortgage save a ton of interest in the long run? -- nm - zork Dec 1, 09:42 3
- Surprisingly no. I paid an extra $100 last month, and it reduced my monthly payment by a whole 50 cents. - ceregon Dec 1, 10:03
- well, he still needs that rent to apply to his monthly mortgage payments i'm assumiing. -- nm - El Fandie Dec 1, 09:44 1
  - if he used the money last year for something else, then I assume he doesn't -- nm - zork Dec 1, 09:48
Is this the hot one who walks around shirtless? -- nm - Dano Dec 1, 09:41 1
- Some people think he's hot. He's definitely buff and goes shirtless a lot. -- nm - ceregon Dec 1, 10:02
Do it. Put the money in a CD, pay off a credit card and save on the interest, or something like that. -- nm - Mop Dec 1, 09:41 3
- I have no debt other than my mortgage, and 30 years fixed at 6% is fine with me. - ceregon Dec 1, 10:00 1
  - It's guaranteed money. You're sure you'll get the money. No pestering for rent every month. And it helps out a friend. -- nm - Mop Dec 1, 10:03
- What mop said. -- nm - lileve Dec 1, 09:43
eh, i'd let him do it. you go the money and if he moves for some reason, you're set. -- nm - colin Dec 1, 09:39

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Prepayed Rent Situation

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