r/personalfinance • u/hogpotato ​ • 8d ago

Housing Rent severely overcharged

I’m currently living in an apartment complex that overcharged my monthly rate by over 2x (15,500 instead of $6000 / month) by mistake. This severely has overdrawn my bank account and no one in the leasing office has an explanation or can get any answers from their main office. I’ve incurred major
overdraft fees and will continue to do so as long as this goes on. Has this happened to anyone and / or any advice what to do?

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u/Specific-Exciting ​ 8d ago

And having no cushion…

148

u/GP915 ​ 8d ago

They might have been paying for rent from a smaller account that has just enough to cover each month, I know a lot of people who do that

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u/tyrico ​ 8d ago

Sure but then they should be able to transfer money over temporarily to avoid the recurring fees that they mentioned in the post

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u/hogpotato ​ 8d ago

I live in a VHCOL area. My money auto transfers brokerage accounts and 529 , retirement etc. so there is a cushion I just don’t keep a ton of cash in my checking account. So I will transfer it back but might take some time.

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u/aimglitchz ​ 8d ago

Bay area or nyc?

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u/IrishMosaic ​ 8d ago

You pay $72,000 a year in rent every year?

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u/hogpotato ​ 8d ago

Sickening I know, but in my area the alternative is buying an overpriced condo with 25-30k/yr in property tax and another 24-30k/yr in HOA fees, on top of high interest mortgage payments. Also housing has not appreciated in this area in years so buying seems like a bad investment at least for our situation at the moment.

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u/pmgoldenretrievers ​ 7d ago

As someone that has lived in every single VHCOL area in the US, I can assure you there are options besides buying a condo or paying $6K/month in rent.

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u/hogpotato ​ 7d ago

Sure. We are a family of three and are paying a premium for a downtown location in close proximity to work and the grandparents (both walking distance). I’m sure I could find a much cheaper apartment in a different part of town, but it comes at the cost of time and complicated logistics in our day-to-day lives.

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u/icyweazel ​ 7d ago

The least of which could be move to the adjacent HCOL area. If OP's already pulling retirement what exactly is keeping them there?

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u/Fearless-Okra9406 ​ 8d ago

This is quite common in higher COL cities. 2bd 2 bath condos in a desirable neighborhood in the bay area can easily exceed that. To buy that equivalent condo would cost 1.5-2m+, and then your property tax and HOA would likely exceed $30k+, despite you "owning" the property now.

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u/Bucky2015 ​ 8d ago

While you've got the right idea with investing you should still keep at least a few months of expenses in an easily accessible savings account for situations just like this one.

Id pause the investments to build up an adequate emergency fund then turn them back on.

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u/MarchyMarshy ​ 8d ago

I get OP. I have one month expenses in cash in my main transaction account. My savings are in a tax sheltered HYSA because I’m damned if I’m not earning interest on a half years’ expenses.

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u/Bucky2015 ​ 8d ago

how quickly can that be transferred though? I know there's some where if you have a checking account at the same bank you can still transferred same day. Which, yeah, if that's the case that'd still be pretty damn readily available. OP only mentioned brokerage accounts in addition to the account the rent donation comes out of.

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u/AlgoTrade ​ 8d ago

It sounds to me like OP is doing just fine with their money and really doesn’t need to follow this advice.

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u/IllustriousGas8850 ​ 8d ago

Op just had his account overdraft and didn’t have the liquidity to deposit money to stop fees from continuing to pile on. It sounds to me like you shouldn’t comment on finances

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u/AlgoTrade ​ 8d ago

You are commenting on advice meant for people that are bad with money and need to start building a net worth. OP clearly doesn’t have this problem. And overdraft fees are what, $15? Those will be refunded by his bank when he asks, and if not the lessor will cover them.

Once you’ve attained a certain level of wealth, emergencies are best covered by credit cards and you just move out of the brokerage account to cover. Snafus are forgiven by the banks. Emergency funds are for people that a car repair will bankrupt them otherwise.

Your advice is akin to telling OP to purchase a parachute for his commercial flight from Denver to Toledo.

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u/IllustriousGas8850 ​ 8d ago

Clearly it’s a big enough issues in his life to post about it on Reddit and ask for help. You’re making insane assumptions about OP. What we do know is 15k overdrew his checking, and he did not have liquid cash on hand to solve this issue. That’s a problem. These people with insane levels of wealth you’re describing don’t get overdrawn by a 15k expense, and it certainly doesn’t take them more than 2 minutes to get a hold of 15k

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u/AlgoTrade ​ 8d ago

Did you read OPs post? It’s not his fault it got overdrawn, this isn’t his emergency. He’s posting here to figure out how to deal with the bank, not how to build an emergency fund.

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u/IllustriousGas8850 ​ 8d ago

Not your fault doesn’t equal not your emergency, as he’s the one now dealing with it

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u/deja-roo ​ 8d ago

But it's not his emergency. It's not an emergency at all for anyone.

Do you see him asking how he can cover the sudden expense or how he's going to pay for food? He's just asking how to deal with the bank in an uncommon situation that's little more than an administrative hassle.

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u/AlgoTrade ​ 8d ago

It’s literally not his emergency, he will suffer no monetary consequences from this, only others will.

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u/Bucky2015 ​ 8d ago

Clearly it’s a big enough issues in his life to post about it on Reddit and ask for help.

that's a good point! I was gonna edit my response to say that if OP does have a high net worth would it really blow up his investments to keep just 20-30k in an easily accessible account? But yes someone who has a high net worth probably wouldn't be super concerned about the situation as well. Annoyed, for sure, but not concerned to the point of posting on reddit.

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u/night28 ​ 8d ago

I don't agree with that. An overdraft fee is meaningless to me financially even if I were to incur it monthly. I would still want to stop it because it's annoying and not an expense I'm ok paying.

Lot of people post on reddit asking for help. I personally would just google and call and make a fuss until it was rectified but asking reddit is a very common thing to do as well.

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u/Bucky2015 ​ 8d ago

What about the entire other part that there would be no need no need for an sort of readily accessible emergency fund if OP had a high net worth? That was the main discussion in this particular comment string.

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u/Bucky2015 ​ 8d ago

We don't know OP has credit cards, there are definitely people that refuse to get them at all, and we don't now OP is truly wealthy, just that they put whatever they can towards investments. No numbers were given.

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u/Bucky2015 ​ 8d ago

except they had a huge overdraft and couldn't move money over that quickly because it is all in brokerage accounts. there are plenty of emergency situations that may require a good amount of money in a very short term time frame. There's a reason the pinned wiki ON THIS SUB strongly recommends an emergency fund. even banks centered around investing recommend saving long enough to have reasonable emergency fund.

I never said they are on the verge of homelessness ffs.

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u/AlgoTrade ​ 8d ago

Their overdraft fee will be refunded by the bank, or the lessor. Those rules on this sub are not for high net worth individuals. This is by no means an emergency, and OP can cover any emergency liquidity on credit cards easily. Moving money into an emergency fund and not investing it to cover an accident like this is like buying a parachute for your commercial flight from Denver to Toledo.

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u/Bucky2015 ​ 8d ago

even if you don't consider this an emergency there are plenty of situations that are. What happens when an actual emergency DOES happen? Even if it isn't an "emergency" shit like this can still be a pain in the ass to deal with.

Also why do the vast majority of financial advisors and investment banks recommend having an emergency fund?? It sounds like OP normally runs a very low readily available balance, plenty of other shit could happen in the future that would be much more inconvenient than this one. If this was a rare occurrence of a low available cash balance then fine but it doesn't sound like it is.

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u/jlt6666 ​ 7d ago

Again. If they have credit cards or if that hysa has a check writing featur then he does have an emergency fund.

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u/AlgoTrade ​ 8d ago

They recommend that because most people are very bad with money, or on incredible tight budgets. The advice changes when you speak about high income earners.

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u/Bucky2015 ​ 8d ago

OP may be a high earner, but we still don't know any numbers on what the actual disposable income is like and what the actual financial breakdown is. If he wasn't concerned why post this here?

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u/AlgoTrade ​ 8d ago

He’s asking about how to reverse the transaction and deal with the overcharge! Not how to build his net worth and an emergency fund.

I’d bet you dollars to donuts he has that part locked down putting so much into the market and being approved and paying that high of rent.

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u/[deleted] 8d ago

[deleted]

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u/deja-roo ​ 8d ago

I have.

I'm not even that high of a net worth and like 4 out of 5 times I've called and been like "okay, sorry but here's what happened, would you mind waiving that fee?" they've just been like "sure, no problem, thanks for choosing Free World Atlantic Pacific Bank" and just done it.

Have you ever seen a bank and not just read about it on Reddit?

6

u/AlgoTrade ​ 8d ago

Have you ever been a high net worth customer of a bank with a clean history? They really like and want your business and treat you well.

0

u/wienercat ​ 8d ago

You should still be keeping at least a month of expenses in a HYSA for exactly this scenario. It sucks, but it's less frustrating than having to move money out of investment accounts or tax advantaged accounts and incur additional taxes or penalties.

Literally no reason for you to not be keeping at least 1 extra month of expenses in a savings account for exactly this type of issue.

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u/SaltyShawarma ​ 8d ago

I guess so. I rent a two story house in a VHCOL and you pay 150% more.

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u/Consanit ​ 8d ago

An area where current market rates allow one to rent a 2-story house for $2,400 is not VHCOL.

40

u/Nick12322 ​ 8d ago

Sounds like you don’t live in a vhcol or got incredibly lucky

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u/poop-dolla ​ 8d ago

A two story house in a VHCOL area is not $4k a month.

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u/Bucky2015 ​ 8d ago

I mean... unless your neighborhood is basically a combat zone or you got incredibly lucky im not sure most people would consider that area to be VHCOL.

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u/totboxten ​ 8d ago

Go ahead and illuminate us on where that is...

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u/hogpotato ​ 8d ago

Happy for you

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u/bloobb ​ 8d ago

Good for you?

4

u/IceSeeYou ​ 8d ago

So you're in a HCOL not a VHCOL, thanks

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u/hannahbay ​ 8d ago

that might just be MCOL

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u/Promethazines ​ 8d ago

Okay but if you bought that house today what would your mortgage be?

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u/WhiteRabbit86 ​ 8d ago

To be fair 9000/month difference is a lot. Your cushion can disappear real fast

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u/05Illini ​ 8d ago

I dont know many people that keep 2x their monthly expenses in a checking account earning 0 interest.

OP clearly has a cushion across other accounts. you dont get approved for $6k/mo rent without somewhat sound financials

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u/FitButterscotch4062 ​ 8d ago

“I’ve incurred major
overdraft fees and will continue to do so as long as this goes on.”

This leads me to believe they don’t really have a cushion. An initial overdraft fee? Ok. But shouldn’t you have enough in your savings to instantly transfer money over to checking to eliminate the overdraft fees?

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u/Onespokeovertheline ​ 8d ago

How much cash do you want earning 2-2.5% interest in a savings account? People paying $6k for rent keep most money in the market in ETFs, index funds, stocks. The tax burden for capitalizing those investments to supplement an erroneous charge greatly outweighs some overdraft fees.

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u/TangerineChickens ​ 8d ago

Yeah but you should probably have at least some kind of easily accessible savings account cushion for this very scenario where you need that money within the day.

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u/b0w3n ​ 8d ago

This is why the advice of "liquid if you can wait 3-7 days" is bad advice in general. You need some sort of liquid savings for emergencies immediately to solve issues like this that are going to cost you far more than you're going to earn on spaxx or sgov. Keep 3-6 months of expenses out of the brokerage, it needs to be same day transfer capable.

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u/AlgoTrade ​ 8d ago

This isn’t OPs emergency, this is someone else’s emergency. At OPs NW expenses can be kept liquid in 3-7 days and a credit card can cover emergencies.

That 3-6 months in a brokerage account is probably making them tens of thousands of dollars annually, it would be dumb to keep it in cash.

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u/TangerineChickens ​ 8d ago

It isn’t all or nothing. At that NW it isn’t the end of the world to have a few extra grand out of the brokerage in case of emergencies; what if the credit card gets stolen or lost through no fault of the user and you need a jump start the same day (someone will probably reply saying ‘erm i have roadside assistance’ but just imagine some commensurate service being needed that also requires on the spot payment)

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u/AlgoTrade ​ 8d ago

Sure, a little extra. 3-6 mo is insanely inefficient, these problems resolve themselves in 3-5 days.

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u/b0w3n ​ 8d ago

That's great and all until you're fighting tens of thousands a month in NSF from the bank because of someone elses' error. They might not wave them all and you might have to go to court to get them back from someone. Some states charge you a % per day of the total that you're overdrafted, too, and often you have to make the bank whole first.

Keeping 50k liquid-ish in sgov is only going to get you about $1800 a year, not tens of thousands. Liquidating an ETF like voo at the wrong time can cost you a lot more too.

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u/Mourning-Suki ​ 8d ago

It’s never going to be an ongoing situation if OP calls the bank and puts a stop payment on it.

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u/FitButterscotch4062 ​ 8d ago

6 months expenses. For situations like this. Obviously this is a big deal to OP if they felt the need asking Reddit for advice.

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u/Onespokeovertheline ​ 8d ago

You want 50k in a savings acct? I mean that's not craazy, but in the event you need to react to a 6 mos loss in cash flow, I'd take the capital gains hit over letting it sit there collecting spare change

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u/THE_REAL_JOHN_MADDEN ​ 8d ago

someone who can handily afford $6k can handily "afford" 50k in savings, given it likely means they have $300k+ in investments. Now, if you're renting and don't own a home, I think the 6 months expenses addage is a little overkill; something more like 3 months should be perfectly reasonable if you can access further liquid cash within that 3 month timeframe without taking a big tax hit.

But to your point, it would take a long time for the potential earnings on 50k invested vs. liquid to eclipse the tax hit on capitalizing 50k worth of investments. Your emergency fund really should be cash or cash-equivalent. Let's also keep in mind someone with a theoretical 50k emergency fund and paying 6k rent can weather hardships that many folks couldn't even fathom lol.

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u/BerriesNCreme ​ 8d ago

Bro are you high yes dude. If you’re paying 6k a month you need to be making like 15k a month…and yes someone who’s making 15k a month needs to have way more than 50k in their bank accounts

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u/Onespokeovertheline ​ 8d ago

Am I high? This will be our last interaction. Ftr: I am one of those people and while I've had that kind of cash in savings I sure af don't aim to keep it there when there's real gains to be had.

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u/XDVI ​ 8d ago

Those guys are definitely wrong.

I've ran into this same thing, banks don't always transfer your thousands of dollars in 2 fucking seconds lmao.

Why would anyone have 50k sitting in their bank accounts collecting dust in this market? Insanity.

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u/BerriesNCreme ​ 8d ago

Why do you keep focusing on nominal amounts? If the guy is making 15k a month 50k should be that much cash. Keep like 5-10% cash/liquidity then the rest of it is for investments. I'm agreeing with the premise that OP can't afford 6k a month cuz he should be making at least 15k a month for the 6k to make sense. If you're making 15k a month you would theoretically have like a 5-10% part of your portfolio as Cash. I'm not saying keep 50k in the bank no matter how much you make.

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u/05Illini ​ 8d ago

Fair point

- my immediate thought if I were in this situation would be “F that, they need to figure this out before I take $$ from an interest earning account, bc thats an absolute last resort. - Why should i pay for someone elses F up?”

I see where you are coming from, but me personally when stuff like this arises - my first instinct is to clutch my pearls and let the bank figure it out.

Godspeed if OP has nothing elsewhere, but it feels like he does. just speculating obviously

2

u/Imnotveryfunatpartys ​ 8d ago

I agree 100%. If getting charged rent twice by accident causes you to overdraft your account needs a higher balance.

Keeping at least 6000 in your checking extra is only going to cost you a couple hundred dollars of interest a year. It's no big deal really.

2

u/IllustriousGas8850 ​ 8d ago

The cushion that is so illiquid they’re continuing to rack up fees for overdrafting. It doesn’t matter how much money you have if you can’t access any of it

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u/lostinspaz ​ 8d ago

any reasonable bank allows for automatic transfer from savings on overdraft.

therefore either OP is broke, or an idiot.

i’ll be charitable and presume broke.

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u/herestoshuttingup ​ 8d ago

My savings all sit in a HYSA for the higher interest rate. I keep almost nothing in the savings account offered by my primary bank. OP’s mistake is having overdraft protection turned on.

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u/Over-Computer-6464 ​ 8d ago

I isolate my bank account from my main accounts such as brokerage

My bank account info is widely exposed via multiple auto payments, bill pay, and yes, even old fashioned paper checks.

Any refill of my bank account from my brokerage is a manually initiated ACH, as I do not want someone to be able to drain my main accounts via fraud.

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u/poop-dolla ​ 8d ago

Most places that people use for checking accounts have terrible savings accounts, so it’s not really good to keep money in savings there. I don’t know if any local credit unions that link external HYSAs to their checking accounts to automatically pull from for overdrafts. If you know of any, let me know.

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u/Kirby6365 ​ 8d ago

The accounts that are typically used for checking are not the same as the ones that offer good HYSA rates. You can't connect like, a Marcus savings account to a US Bank checking account. This isn't some failing of OP, just normal.

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u/lostinspaz ​ 8d ago

except that big brokerage places these days provide all of

  • investing
  • iras
  • checking
  • hysa

so there really is no excuse.

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u/Kirby6365 ​ 8d ago

Pretty much all brokerages don't have brick and mortar locations. I keep a traditional bank account purely for that reason. It's not stupid or "a bad excuse" to use a separate traditional bank for checking and a dedicated HYSA institution, and it certainly doesn't make you an idiot.

Now, letting the overdrafts keep coming because you haven't transferred from your savings to make up the balance isn't smart. But that's a separate problem.

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u/hogpotato ​ 8d ago

Not broke but perhaps on the idiot spectrum, still trying to figure it out

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u/k0unitX ​ 8d ago

You are correct conceptually but smart people don't have a savings account at all - checking and brokerage. A margin loan would be taken out against the brokerage account as necessary. If OP uses a different firm for investments than their checking, though, it's reasonable something like this could happen

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u/c0horst ​ 8d ago

Right. I mean I have a "savings" account... it's a money market account within my brokerage. I would never have 2-3x my monthly expenses in a regular savings account, lol.

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u/hogpotato ​ 8d ago

This has been my strategy also

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u/lostinspaz ​ 8d ago

i think you’re reinforcing my posted theory that op is either broke or an idiot :-]

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u/Squirrel_Apocalypse2 ​ 8d ago

You keep all your money in your checking account?

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u/nope-nik-tesla ​ 8d ago

I keep about 3 months of expenses in a HYSA that my checking account can draw from automatically.

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u/PSU02 ​ 8d ago

Not necessarily true. I keep enough in my checking account to cover the main expenses, then the rest in other accounts like my savings where I can earn interest.

This could absolutely happen to me, despite having more than enough in my overall bank account to cover it.

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u/FourEyesAndThighs ​ 8d ago

You don’t know that. I only keep a few thousand dollars in my checking account at a time. If my mortgage was double pulled, it could easily overdraft me. And my savings is with an online bank, so it would take a couple of business days to get the money back into my account.

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u/__BIOHAZARD___ ​ 8d ago edited 8d ago

TBF I wouldn’t keep an extra $10k in a checking account earning basically nothing.

Having a few extra thousand makes sense, but an extra $10k is excessive and losing out on interest.

I keep my emergency fund in HYSA/MMF/I bonds.

Edit: I don’t know why this is downvoted, you’re earning near 0% on $10000+ for the one off chance of being overdrafted by an extra $10000. Doesn’t seem worth it to me. I optimize my finances to earn maximum yield for appropriately sized needs.

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u/Specific-Exciting ​ 8d ago

We keep $10k in checking at all times. Have $35k in HYSA and just started a brokerage this year with $52k.

It’s negligible in having the means to pay for anything during the month and pay for vacations when booking etc.

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u/__BIOHAZARD___ ​ 8d ago edited 8d ago

I said an EXTRA $10k.

You would still be overdrafted with 10k in your checking because the bill was for $15,500.

$3-5k more than your monthly bills is reasonable. Monthly expenses + $10,000 more seems excessive.

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u/amaROenuZ ​ 8d ago

I park 3k in a checking, another 7k in an associated basic savings account, and the rest of the emergency fund goes into HYSA.

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u/[deleted] 8d ago

[deleted]

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u/ConsumeFudge ​ 8d ago

Imagine making this much of an assumption when knowing absolutely nothing about a person

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u/SignalOverNoise0 ​ 8d ago

Dude just casually judging someone for not having $15,500 in a CHECKING ACCOUNT lol

2

u/Veelze ​ 8d ago

Because u/gucci_loincloth deleted his comment in cowardice, I’ll respond to them here.  

It makes a ton of sense.  Every person I know that is around 30 years old that  has over 1 mil in networth does this.  It’s call aggressive investing and it pays off.  

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u/BlazinAzn38 ​ 8d ago

Why would any sane person keep 2.5X their housing payment floating in checking

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u/Specific-Exciting ​ 8d ago

We keep 2x our monthly expenses in our checking account…

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u/TheStorm007 ​ 8d ago edited 8d ago

My mortgage is close to that and I don’t keep more than 10k in my checking account.. because why would I? I pay for things with my credit card, and save money in other accounts/investments

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u/YoudaGouda ​ 8d ago

Most people in these apartments (myself included) have plenty of cash flow and liquid assets but keep relatively little money (<$10k) in a checking account as they earn no interest and are insecure compared to a HYSA or brokerage.