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Boomerang Kids and Rent

Five ways to deal with the thorny issue of rent when grown children move home


Daughter Using a Cash Machine and Putting Banknotes and Her Bank Card Into Her Wallet Next to Her Mother Holding a Bouquet of Flowers
Andersen Ross/Photodisc/Getty Images
Grown children usually move back home for financial reasons. They’re job hunting, paying off college loans, saving for a down payment or hoarding pennies to deal with that painful apartment trio – first and last month’s rent and a security deposit. So most families wrestle with a basic issue - whether or not to charge rent on a childhood bedroom. After all, if junior’s not saving cash, he’ll never move out. But make the situation too cushy and junior’s not going anywhere.

About half the 20-somethings and grown children who move home pay some sort of rent, but there are many options between zero and market rate. Here are five possibilities:

  • The percentage system: If junior was looking for an apartment he could afford on his salary – assuming he has one – a finance expert would tell him to cap his monthly rent at 30% or less of his take-home salary. Many families charge their boomerang kids a lower percentage, such as 10%, so their kids can stash the other 20% in a savings account or use it to pay down college loans.

  • Flat rate: Others feel more comfortable charging a flat rate - $200, for example - to help cover the increased expenses.

  • Nest egg: Some families collect rent, and then quietly set it aside to present later as a nest egg, a contribution to a down payment or a lump sum college loan payment. That way your young adult learns to budget for rent and other expenses – and meets his goals sooner.

  • Water, power and HBO: Whether or not junior pays rent, many families have their grown children pay a share of the utilities, not just because there are increased expenses associated with a “roommate,” but as a reality check too. Novice renters tend to forget that there are more expenses associated with an apartment than that check to the landlord.

  • Errands and chores: It’s important for a boomerang kid to contribute to the household, not only financially but in non-monetary ways too - running errands, cooking, lawn mowing or housekeeping.
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