Relatives as Tenants?

Question

Hello. My husband and I are looking to get our feet wet in home rehabbing and land lording. We have extended family in the area many of whom will probably be lifelong renters. We also have two Millennial children who will, knock wood, be out of college and finding their own way in a year. Does anyone have any good stories or cautionary tales about renting to family? Our thoughts are while there might be bumps like late checks, noise complaints we by and large know who were are dealing with and that as far as our own children are concerned, some of the rent they pay will wind up in the family estate. We'd still want to do all paperwork just as we would an unknown tenant who passed our screening tools and make it known that if it comes to it we would still be prepared to evict someone who was a problem.

Peter Sanchez · Answer

I wish I could put into words what a terrible idea it is to rent to family.  My mom decided to rent to my idiot cousin because he has 3 kids and felt sorry for him.  I don't think there has been a month that he hasn't paid rent late.  If it were up to me, I would've evicted him a loooong time ago.

If want to get the feeling of what it's like to rent to family, without actually doing it.  Then for the next year, just go to the refridgerator on the first of every month, open it, put your head inside, and just slam it repeatedly.

Sandra May · Answer

Thank you everyone for what was by and large a thumb's down! At the very least you have talked us out of trying to do some sort of sweat equity/Habitat for Humanity-esque deal with my SIL and her husband. I appreciate the reality check.

Evelyn Roper · Answer

I will not rent to family or friends.  There are just too many ways that doing so can turn a friendly relationship into a really bad one.  Better to stick with pre-screened applicants that you have no emotional/relational ties to.

Leland Barrow · Answer

If you like your family do not rent to them. I have an associate that is currently evicting his in-laws. I am not going to get into the details but imagine the worst case scenario. In all honesty if you decide to rent to friends and family then you have chosen the wrong business to be in. Save yourself the time and heart ache and do not be involved in being a landlord. That is only meant as advice.

If you want to give kids or family a place to stay then let them stay for free. If you cannot afford to let them stay for free then you cannot afford to have them rent from you.

Kyle J. · Answer

When I first got into rental properties, I took a class at the local community college on managing rental properties.  The instructor was the executive director of the local rental property management association.  You know what the very first words out of her mouth were?  Don't rent to friends and family!

Of course, my wife and I didn't heed her sage advice and went on to rent to one of our children (also a millennial in her 20's) and another family member.  I won't get into the details, but neither situation worked out well.

If you insist on doing it anyway like we did, have the discussion NOW (not after they're already renting from you) what your plan is if/when rent is ever late (or not paid at all), the property is damaged (either as a result of your family member, their guest, their pet, etc), and all the other things that go along with managing tenants/rentals.

You'd think it'd be easier with family members as tenants because you (think) you know who/what you're getting.  But I would MUCH rather prefer non-family members as tenants.  That way, it's not personal.  It's just business.  If a non-family member tenant didn't pay you rent, would you have any problem evicting them?  I wouldn't at all.  But what if it was a family member?  It'd make for some awkward Thanksgiving dinners to say the least.

In any event, good luck with whatever you decide to do.

Samantha Klein · Answer

I rent an apartment to my aunt and it is working out very well. She always pays on time and keeps things clean. She knows I'm not a pushover and she knows that if she doesn't pay rent, she is out, I made that clear but I'm very happy so far.

Max T. · Answer

Hobby or business? Seems like you're on the fence.

I wouldn't rent to family as many above have also said.

However, I did rent out a studio in my parent's 5-unit right out of college. I had some property management responsibilities but got a deal on below market rent. Staying there for 2 years was what helped me save up for my first down payment.

Rich N. · Answer

ever heard the phrase. never lend money to family and friends?

Same thing !  Actually worst : )

Relatives as Tenants?

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