Renting out your property to friends or family may seem like a great idea at first. You personally know who will be living in your home, and because they are a friend or family you have trust that they will take care of the property for you better than someone you don’t know. You also probably are confident that they will pay their rent on time. Renting to family or friends likely provides them a way to possibly get a cheaper price on the rental as well. If it works out, renting to family and friends can be the perfect situation for someone looking to rent out their home. Below we will describe some of the things to be cautious of when renting to family and friends
For you as the landlord renting your property to friends or family you will likely assume they will pay their rent on time. Maybe you will even allow them to pay their rent a little late each month. But if they begin to stop paying their rent this likely will become an issue for you especially if you need the money each month to afford the mortgage on your rental property. If you do not want to sign a formal lease with your friend or family member, make sure you talk to them about your expectations during their tenancy. Explain the date rent is due, upkeep of the house expectations, and that they are required to pay the bills on time.
For you as a tenant in renting from a friend, you may feel that you may be able to get away with a bit more than you would with a landlord you don’t know. While this may be the case, you do not want to take advantage of your friend. Expect that they will ask for rent every month, as they are likely viewing you renting their property as business and not part of your friendship.
Renting to a friend or family member may test your friendship depending on how the time during tenancy goes. Renting to a friend or family member can be very rewarding for both sides as it is likely helping both sides. The thing to keep in mind is that it should be viewed as a business deal, and if conflict arises you should be prepared to handle to outcome of renting to family and friends.