Being a landlord is full of positives and negatives, it goes with the territory. But if your tenant happens to be a family member, or good friend, then a whole lot of different considerations come into play. Renting to someone you know, gives you an advantage of having a good idea of what they are like, you can draw on shared past experiences, and be more at ease with each other. It may seem initially like the perfect solution but it is advisable to step back and not let emotions take charge as it’s important to minimise any possible downsides to this potential personal/professional relationship. You absolutely must treat your business, as a business, and go through the same procedures that you would with a complete stranger, that means:
- Full background checks.
- Discussing expectations and responsibilities
- Setting out clearly what you will and will not allow
- Go through all the procedures you would with any applicant, have a check list and make sure you tick each box
If they are an understanding friend or relative, they are likely to see the sense in carrying out the above tenancy formalities, and you can explain why in an informal and friendly manner.
Reasons for renting to friends and Family
- There is already a level of respect and trust between you. There is history and you may already understand what is happening in their lives both good and bad.
- They are hardly likely to vanish in the night having not paid rent, taken appliances, your cat, or wrecked your property.
- You may be able to help each other, for example they could keep an eye on your place when you are away, look after your pets or report incidents, if you have other tenants.
- Strangers can rig references and background checks.
Reasons for being wary of renting to family and friends.
- They can take advantage and expect favours or special considerations. “Sorry slight problem, can we pay next week?” They would naturally expect you to be understanding, or in the worst case scenario let them off paying.
- They may start bending the rules you have agreed. “It’s only a small dog, or thought you would not mind if we painted each room in bright colours. “But it’s your aunty as well, you don’t mind if she stays in our spare bedroom for a while?”
- You feel you cannot be strict and enforce things because it could ruin your relationship. It may also have implications with other members of the family or friends.
- A relationship that starts off too relaxed may come back to haunt you.
The importance of requiring a solid lease agreement, which you review together on a regular basis, should not be overstated when letting property to friends and family. Set the standard from the start over what you will and will not accept. That way you should not be taken advantage of and enjoy the fact that you have a good working relationship and can pop around for a cup of tea anytime.