Unless you’re working with a professional property manager who can serve as a buffer between you and your loved ones, renting out property to family and friends is a bad idea. We love them, but you have to beware of some of the dangers that exist when you allow them to become your tenants.
Treating Your Rental Property Like a Business
It’s very important to treat your rental property like a business. That means if you rent out a home to friends or people you know, you’ll have to treat them like any other tenants, regardless of your relationship. It’s a good business practice. You have to separate business and personal relationships, and a lot of times this gets lost in translation when you rent to family members.
Potential Areas of Conflict
Here are some of the things we have seen when landlords allow their family members and friends to become tenants.
- The property owner never seems to want to run a background check on the tenant.
- The landlord never requires a security deposit.
- Free or discounted rent is provided while the tenant looks for a job.
- Your tenants hesitate to tell you about maintenance issues because they know you’re giving them a break.
- You’ll be made to feel guilty when you charge a late fee on unpaid rent.
- Necessary repairs are missed because your tenant doesn’t feel comfortable telling you about what’s broken or in need of maintenance.
- You may ultimately have to evict, and that’s when relationships can really go south.
Protecting yourself has to be your first priority, no matter who you are renting to. Remember
to always keep those things in perspective. A property manager can help with establishing boundaries and providing the level of professionalism that’s needed in a situation like this.
If you have any questions about how to rent to family and friends, please contact us at Hampton & Hampton Management and Leasing.