Renting your home to family and friends might seem like a great idea because you know the person you have in your property; therefore, you assume everything will go well. This is a topic we get presented with a lot, particularly when we take on new accounts. It’s something we need to discuss because it’s to be avoided at all costs.
Why Renting to Family and Friends Should be Avoided
Renting to family friends, acquaintances, colleagues, or other people in your social circle can be a disaster. Don’t do it. So many times, we get people coming to us and asking us to manage their property. Of course we say yes, and we deal with the lease, preparing the property, and other details. Then, they tell us that they already have a tenant. When they tell me they have a tenant who is a friend, cousin, brother, etc., I get nervous.
Remember that a lease is a legally binding document, and you have to look at it from the point of view that you might have to use it in court when you ask a judge to help you enforce it. Do you really want to do this with your friend, neighbor, or friend of a friend? You don’t want to put someone on that document that you might have to take to go court. This is the biggest relationship wrecker.
Always Use a Lease
Another problem we see a lot is when agreements are made outside of the lease. Property owners might agree verbally with their tenants that a certain amount will be paid, but there’s no documentation to prove it once those tenants stop paying. This goes wrong 99 times out of a 100. You cannot operate without a lease.
If you’re thinking of renting to friends and family, my answer is always no – don’t do it. It goes wrong so many times, and it can ruin your relationship. While it might seem like the easiest way to get your property rented, you will have the most problems later. Stick to being professional about how you rent your property. Use a lease and rent to a qualified tenant.
Remember me telling you not to do it.
If you have any questions about how to rent your property in this market, or you’d like to talk about Orlando property management, please contact us at Warner Quinlan Property Management.
Mark Pagdin
President/Broker Warner Quinlan, Inc.
For more than 20 years, Mark has managed his and clients’ investment portfolios, garnering him the unique perspective as both owner and property manager. His blog series is an invaluable tool for investors looking for guidance on property management, purchases and acquisitions.
