As a landlord, one of the hardest decisions you face is choosing who your tenants will be. When it comes to strangers or online inquirers, your first instinct would be to have them go through a proper screening before making your decision. However, when it comes to friends and family, how can you be sure that they will be an ideal tenant? They may be a wonderful cousin, sister, or friend, but what about a tenant? While there are some benefits to renting to friends and family, they are also some drawbacks. Keep reading to see some pros and cons.
Here are a few reasons why you might lean towards renting to friends and family.
Personal Knowledge of Background
An advantage of renting to someone you already know is just that – you already know them. Having a good idea of your future tenant’s personality and habits can take some of the guesswork out when finding a new tenant. You have a bit of insight as to whether or not they are reliable, trustworthy, or clean. If they’ve shown good habits so far, chances these will continue when they rent your property. This can help you make the right decision when considering future tenants.
Helping Out Someone In Need
We all know the saying, “There is more happiness in giving than there is in receiving.” You may have plenty of friends who are looking for suitable living conditions at a good rate with a trustworthy landlord. Why not take some of the stress off them by offering your property? When renting to a person that you trust, you can often make allowances within reason that can work for both tenant and landlord. This may be anything from changing the rental due date to allowing them to bring a pet into the property.
Reasons to Avoid Renting to Friends and Family
While there are some benefits to renting to friends and family, you should also consider the negative aspects of it. What problems may you run into? Could they do more harm than good? Here are a few cons of renting your property to friends and family.
Expecting Special Treatment
One of the biggest problems a landlord may face is their tenant expecting special treatment. It can be difficult to avoid blurring the line between friend and landlord if they begin to fall on hard times or expect you to simply be more lenient. They may begin to push the boundaries when it comes to paying rent or expect you to come running for small issues in the property. If you happen to be renting to an older family member, they may not give you the respect you deserve as a landlord. This may also be the case if you rent to a close cousin who remembers you being the fun cousin and not the one enforcing a noise curfew.
Negatively Affecting Relationships
Another negative aspect of renting to people you know is how it could affect your relationship going forward. When you are put in an awkward position with your tenants, it can be difficult to put your foot down. You may worry about how that person and mutual friends may begin to view you. If you had to evict your Uncle Steve, would your cousin stop talking to you? How would this affect your relationship with your other family members?
Have you ever rented your rental property to friends and family? How did it go? What advice would you give a landlord in this situation?
Let us know in the comments!
2 Replies to “How to Navigate Renting to Friends and Family”
Don’t skip the steps of renting to a stranger just because they are family or friends. Draft and sign contracts with beginning and end dates Obtain a deposit, require renters insurance and state clearly the rules in friends sleeping over, pets, late fees and noise. If they stay after an end date be sure to acknowledge that in writing as a holdover where all terms still at and recreate a month to month agreement or a new lease
I have many young people in my family, who are first starting out in the work force. They all have great jobs and some can handle the required rent and others come close. Before I am asked, i let the parents know that it’s a bad idea to rent to fiamily and friends, but in the event that it becomes an issue and I find that for some strange reason, I must rent to them, then I will require the parents to be fully responsible for their childrens lease. So far not takers.