Renting To A Friend, Don't Mix Business With Pleasure

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Services for Real Estate Pros with Rentec Direct Property Management Software Tenant Screening

A friend and I were recently talking and she mentioned that she was looking for a house to rent. I indicated that I had a rental that would be coming vacant in the next month. The timing couldn't have been more perfect for my friend or myself but I immediately regretted letting her know about my upcoming vacant property. I have an unsaid rule about not mixing business with pleasure to avoid uncomfortable situations, burned bridges, or a loss of a friendship. This particular property I have a property management company managing and I was so relieved that when she called to inquire that they told her that there was 4 applicants ahead of her. Being a landlord is a business and it should be approached with the same level of measures to ensure success.

There are so many ways that a landlord/tenant relationship can go wrong and when you add in the dynamic of knowing each other personally there can be even more trouble.

1. A False Sense of Comfort

A tenant who feels comfortable with their landlord may take a more casual approach to the relationship. For example, they may view paying rent a couple of days late as no big deal because the landlord knows they're good for it. A friend may be more apt to try to negotiate or bend and break the terms of the rental contract. A false sense of comfort can come  from the landlords position as well. For instance, the landlord may feel like they don't need to run a credit and criminal background check because they feel they know the person. Running the reports can reveal a history that your friend has chosen not to disclose. Crossing these boundaries can make for an awkward and stressful situation.

2. Letting Things Slide

This can come from the tenant or landlord side of things. If you get complaints from other tenants that your friend left a stinky bag of garbage on the front porch, that they are parking in someone else's spot, that they played their music loudly late at night you may be hesitant to call them out and ask them to discontinue the behavior. On the tenant/friend side, they may be hesitant to complain about issues with the rental for fear of coming across as petty or a nuisance. For fear of insulting the landlord friend a tenant may neglect to tell them about an infestation of varmints or insects which could lead to damage to the property. A leaky sink or toilet could quickly turn into dry rot which is  an expensive fix if not taken care of promptly.

3. Favoritism

It's not right or legal to treat one tenant differently than another, particularly if the terms of the lease are the same. If a late fee is charged to other renters when rent isn't paid on time then the same should apply to the friend. A landlord may feel a sense of guilt if they are asking for the rent payment particularly if they know that their friend is going through a hardship. It can be extremely stressful and most likely a friendship ending event if an eviction has to be processed. But, if the friend is breaking the lease agreement it is important to treat them as you would any other tenant.

4. The Inspection

At the time of inspection whether at move-out or a routine inspection damages are noted to the property it's important to maintain good business practices and charge the tenant accordingly. It's particularly difficult at move-out when the friend is expecting to get their full deposit back. In some cases the friend may even become a little lax and not clean the property as well as they would have otherwise. If some or all of the deposit is withheld to cover damages the landlord may hear about it long after the friend has moved out and it may even make it to their greater circle of friends making for some tense moments.

If you do decide to rent to a family member or friend it's important to separate the business and pleasure aspects of your relationship. This can be very difficult to do, but, if it is made clear from the beginning what is expected and the rules it could work. I personally value my friendships to much to risk the loss of a friend.

 

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Dulcey is a member of Rentec Direct who provides Property Management Software, tenant ach payment processing, tenant credit check, and criminal reports for property managers and landlords. The information in this post is just that, informational and should not be used as a substitute for legal advice. 

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Rainer
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Kevin Stormer
Homeowners Mortgage Enterprises Inc. - Greenville, NC

I guess you really have to ask yourself the question, "Do I want to keep my relationship or keep money in my pocket?"  Good friends are hard to find...tenants are not!

www.iheartloans.com

Mar 05, 2015 06:07 AM #1
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Rob Thomas
Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 - Bristol, TN
Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro

Great post... too many land mines there to step into!

have a great day

Mar 05, 2015 06:52 AM #2
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

I once rented to a friend, regretted it very quickly and we are not even close to friends anymore.

Mar 05, 2015 12:54 PM #3
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Dulcey Schuster

Property Management Software
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