I just moved to a new city for my master studies. I met a man via a social website who is already living here and he offered to rent me his two room apartment for a year while he was studying abroad, then there would be a possibility to extent my stay until the end of my studies but we would share the living space.
Original price seemed very reasonable since it was a private full apartment for myself. Just some weeks before I was supposed to move in he told me he was cancelling his year abroad because of lack of funds. The price did not change, but given the market prices of the region it was still a reasonable amount so I didn't say anything. Now upon coming here I realized he is living in a student apartment (the place is subsidised by the government so rent is much cheaper). Looking at the price lists on the official student dorm's website I suspect he pays around 420€/month for the full apartment. I am paying 480€/month for my single room with furniture, so he is basically paying negative rent.
According to the law of the region (Sweden), it is illegal for you to sublet your apartment for more than 10% above the set price (and I'm just renting a single room). Also I do suspect that subletting a room goes against the student dorm's community rules. So in fact what he is doing is illegal, and possibly against the student housing rules.
The problem is that we have become quite good friends in the short time we have been living together, also the housing situation in the city is quite tough. Waiting lists for students are long and looking for an apartment in the middle of the semester would be quite a nightmare. Also I do prefer living in a quiet two room apartment and not in a dorm, since I want to focus on my studies.
I don't think I am ready to give an ultimatum of "either you lower the rent or I move out", I think it is highly beneficial for both of us to live together, I just want to reach a better price. He said himself that he is very happy with me as a roommate, and I suspect it would be quite hard for him to get another person who would be comfortable living with him and also with the irregularity of the situation. I still have not signed a contract but we have talked about it and he agrees that we should do it ASAP.
How should I approach him about this so I get an optimal price and it does not escalate into an argument?