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Updated almost 8 years ago, 02/20/2017
My first Rental, turned into my first eviction :(
I've heard it a million times, "never rent to family." Being the naive person that I was -- possibly still is -- I didn't listen.
I rented my condo out to a family member in 2013. By early 2014, I noticed their rent payments were becoming more and more sporadic. This concerned me. By August 2014, I told them it was time they find else where to live. After a heated reaction, they agreed. Fast forward to January 2016, they were still there and somehow amassed an incredible $15,800 of back rent. The only course of action I saw by that point, was to evict. It was the hardest decision that I made that day -- it was probably a Sunday, Sundays are slow days for decision making needs.
I called my realtor friend to get his thoughts, and I'm not sure if he was trying to be funny or not but he said, "that's why I always tell people never rent to family" -- part of me thinks he wanted to rub a little salt on the wound.
After months of going back between the lawyer and the courts, I received a Summary of Judgement today, and the tenants in my rental will be removed by law enforcement if they do not voluntarily vacate in 2 weeks.
I'm pretty bummed that it came this far. I am not sure if I have questions for anyone or if I am subconsciously searching for some comfort.
In any case, I had to let it out.
Originally posted by @Thomas S.:
Your parents owe you $15,000. So here is a test question to see if you have learned anything and are now able to separate personal from business.
Are you taking them to court to get the money they still owe you ??
Greg, it sounds like you would take your parents to court? In my opinion this stopped being a "business" when he rented to his parents. Personally, I would not sue my parents. I would instead look at this situation as an expensive education with lesson learned. Money is not everything! This post became more difficult for me when I read that the relative was a parent. I personally moved my mom and dad into my own home to take care of them rent free. Dad has since passed away but mom still lives with me. Yes, I hope one day my children will take care of me if I need it. I would not take parents to court to sue. He as already evicted, that is enough in my opinion.
hey there. I want to first day thanks for sharing and I'm sorry you experienced such a hard lesson in the school of hard knocks. Though it seems like you came out of it all the wiser. I don't know your situation but I hope you and your family can get along in the future because of this. As you can tell from some of the responses, emotions do come into play and just add a layer of complexity to everything. These are family members, yes, but they are also adults who made a promise and failed to keep it. You shouldn't have to take the fall for that. All the best to you and your future investing!
WOW, I can't believe how people are reacting to your decision to evict. You did what you thought was best and it obviously took you two years to make this decision.... I don't know your personal situation but my W-2 is as a Social Worker.... I have seen many unimaginable things that parents do to their children and I know you made the best decision.
@Seth Macomber this is less about renting to family and more about renting to someone you knew would be trouble. You know your parents money habits and character better than anyone. You knew going into this that they had money problems and you still rented to them? Don't try to say you never expected this to happen. I can guarantee which relatives of mine would be trouble and which would be fine. I do not think evicting them was a good idea and going after them for $15K is a worse idea. This was your bad decision and you let it get out of control. Consider the $15K a gift to them for giving you life and opportunity. I know several people who have done far more financially for their parents! Write off the loss and tell your parents you want to rebuild a relationship with them for your children. Everyone suggesting you take a pound of flesh from your own parents is is missing the bigger picture about life. Money is nothing without family and friends. Forgive your parents and let go of this. Use it as a teaching moment with your children about compassion and let the kids know you made a mistake. Let the kids know you are forgiving your parents and you are not going after them for the money.
Several times, I have seen kids disown their parents, only to see their own children do the same thing years later. Don't teach your children that money is more important than family.
Wow, tough one! Family is one thing, parents are another. Friends are also in another bucket. But, after several evictions early on in my investing, I'll tell you one thing I've learned: you can rent to anyone you want that qualifies and sticks to the lease and you need to stick to what it means to qualify and the lease.
If you expect 3X rent as income, don't settle for 2.8. If late fees are due after the 5th, don't waive them until the 7th.
Parents? Wow, if they were down and out and needed serious help, that's one thing, but clearly you saw they were not spending wisely and respecting that you have rent to pay also. VERY sad to hear you are in this situation with your parents. I highly recommend you protect and save your relationship with them and look at this as family, but business. Apologize without expecting an apology, forgive without expecting forgiveness, do whatever you can to reach them without further judgement.
You will recover financially but it's up to you if your relationship recovers. Last thought: poor money management is a systemic problem. Consider that in your rental criteria and possibly even requiring your renters follow a course or book series to get on the path to financial freedom. I don't do this, but a colleague of mine does and I am impressed by his commitment to helping his tenants become financially literate and in control.
Best wishes for lessons learned!
Smh! Take it as a blessing because it happened to me. But now all other tenates don't have a chance because I been through it all.
I'm sorry you had to go through this. Evictions are tough enough without personal dynamics involved. A landlord once told me, don't rent to anyone you have to sit across from at the Thanksgiving table. And this is why.
Haha I love the comments that he should be ashamed of himself. Like many people here I have the perspective of being a son and a father. It is the parents responsibility to plan their life in such a way that they are not a burden to their children. They completely took advantage of the OP, they put the OP in this position. They should be ashamed of themselves. I think it is disgraceful and they destroyed their own legacy. They will now be remembered as the parents that had to be evicted by their son. That is the story that they are passing on.
As a parent I do for my children without expecting anything in return because that is how nature works. We pass on knowledge both genetically and socially so that some part of us lives on. We hope that it is the best part of us. We raise our children, advise our children, and encourage our children to climb mountains and accomplish goals. We don't have kids to leach off of them.
Absolutely he should have evicted them! Absolutely he should take them to court! They owe him money, an apology, and effort towards redeeming their legacy. Kids taking advantage of parents is how life works. Parents taking advantage of kids is insane. They put their child through this nonsense and they need to make it right. I cannot even fathom putting my children through a scenario where they have to stress about my lack of empathy and consideration.
Parents that take advantage of children are parents not worth having.
@Leland Barrow I disagree with your statement that kids taking advantage of their parents is how life works. I watched my uncle take money from my grandma up until the day she died. He sucked every penny from her and as a loving mother she gave everything she had. She died broke with $500 left on a loan she took out for him. You should never give money to your adult kids OR your parents, just like you should never rent to your kids OR parents. Enabling people with spending problems is doing them a disservice. The day you cut them off, the relationship ends. Both are dysfunctional arrangements, but what people misunderstand is that the enabler is just as guilty. Often the enabler is even more to blame.
We all know there is little hope that his parents will ever pay back that $15K, so he has the choice of trying to rebuild a relationship or walking away. The money is gone but they are still alive.
I agree that kids take advantage of parents through most, if not all, of childhood. But once "kids" become adults (at least in the legal sense), that entitlement should stop. When it doesn't, these situations come up. Some parents and some children will always think, "You owe me!".
Renting to family is just asking for trouble.
You didn't do anything wrong by evicting them. That is the procedure you should follow and not sure your family member even has a case for being upset. Throwing someone out for not paying rent? Is there something wrong with that?
I believe there is a right way and a wrong way to do business with family and friends. I make sure that EVERYTHING is in writing and not just a verbal agreement. If they don't pay I honestly will have no issues following the same procedure as with any other tenant. I'm running a business and not a charity service. That might sound mean to some people but wal mart wouldn't let you walk out with groceries for free would they? It's the same with rentals.
With that being said, I"m really sorry to hear that you had to evict your first tenant. These things do happen but it sucks that it was on your first go.
I urge you to not give up on real estate. This is just a bump in the road. It's the best asset class out there (in my opinion)
- Luka Milicevic
@Account Closed I appreciate your comment, and I will not try to defend myself. I feel if I were to defend myself, I would just be damaging my parent (1 parent, the other parent is not part of this) reputation even more, which is absolutely not my intent. I initially was just looking for a place to vent, because this burden was very hard for me to bear, and I felt comfortable venting to this community.
I will say this though. I did not have the perfect upbringing, or even close, for that matter. But again, I appreciate you standing up for them.
@Seth Macomber, it is amazing how many landlords will professionally screen tenants they don't know but when it comes to friends and family, hand them the keys without even asking them to fill out an application or charging the market rent. It happened to us when we rented one of our first units to my stepson's mother. It went fine for the first year until we found out her boyfriend was growing a pot garden on the property. We issued notice but the two refused to leave and stopped paying rent. It took four months to get them out, partly because we issued a notice with outdated wording we downloaded free off the internet, and we spent a month trying to "bribe" them out with cash for keys (BTW, please don't take short cuts by using outdated or inappropriate legal documents for your rental business to save money). Finally, we hired an attorney who was astonished we had rented to her at all and gave us "your rental business is not a charity" lecture. Because she was my stepson's mother, we did not do a credit check or charge a security deposit either. That stupid tax set us back almost $5,000 in lost rent, renovations and attorney fees. Needless to say we learned our lesson, and started to treat it like a business. Does this mean you should never rent to friends or family? If you are willing to screen them as you would any other applicant and put everything you do in writing and charge them market rate, it can be done. However few landlords are able to balance that act and decide against it.
The good news is you learned your lesson early and won't make this same mistake again!
Good luck!
@Luka Milicevic Thank you. I am definitely not giving up on real estate. This experience was a great learning experience. If anything, I am thankful that it happened now, and not later on.
@Leland Barrow Thanks! Totally agree.
@Aly W. Thank you.
@Damien Ray Sorry you had to go through this too.
@Luke Grogan That was some very sound advice. Thank you.
@Joe Splitrock Its funny because after all of this happened, I began to realize what you mentioned. I started to see how the financial habits while I was growing up were terrible. I did not see it when they asked me to rent out my condo to them, but I saw it when they weren't paying rent as negotiated. I will try and salvage the relationship, but it will take time. If finances were the sole factor in the scope of this situation, the relationship would be easily salvageable. But there are other areas that need to be addressed as well.
@Elizabeth Schellhammer Thank you!!! Social worker! Oh my, you can relate for sure.
@Joshua Diaz Thank you very much.
Whenever I have been asked to borrow money from F&F, I will give the amout that I can afford to lose without feeling bad about losing it or holding it against them.
DO NOT FEEL BAD. This was no different than a parent stealing money from their own kid (and his family). It is awful when you (and your family) are sinking into a hole because you are getting taken advantage of by someone who shouldn't be do so. (And I can just hear a wife who is being compromised by her in laws.) Next time, loan them what you can lose and put them into someone else's apartment.
@Seth Macomber I am very sure the situation is more complicated than you were able to summarize in your postings. Just to clarify whey I say you should salvage the relationship, that doesn't mean you spend every Sunday together for dinner. It may just mean three times a year they get to spend two hours with the grand kids in a controlled environment. You send them cards on holidays and let the kids sign them. You get the point, just some connection. Set a good example for your children because when they get older, they will model your behavior back to you.
@Seth Macomber Well, I certainly didn't expect you to say it was your parents..... there must be some deeper relationship issues here to even rent to them in the first place. I can't even imagine a scenario where I would ever rent to my parents (yet alone evict them). Don't get me wrong, you needed to get your parents out, but it's probably a conversation to find a solution. Any parent who would refuse to a reasonable solution is probably a parent you shouldn't feel bad about evicting.
The fact that you let the rent go so far behind just shows how compassionate you are as a family member, and you are right, that 'soft spot,' does fall under one of the infinite reasons why not to do business with family. At least not if they are in a position to take advantage of your kindness.
Best of luck in the future,
Lindsey
Well you just have to make a decision, do you want to run a business or a charity for your family members/friends? If it's the former, then stick to your guns and establish your expectations early to prevent this from happening.
Sorry to hear that it turned out this way, but I guess life is our best teachers if we learn from our mistakes.
Sir,
I hate to hear your good intentions did not go well. To any and all who may see this comment. Please read boundaries by Dr. Henry cloud, it's a great book.
For those of you that are criticizing his decision, think about this. How many days would a mortgage company or landlord let you go over on your payment date before they kicked you out? It's not like the first time the rent was late or missed he kicked them out. He showed grace for more than two years and over $15,000. His parents rent was a financial responsibility that they accepted. The fact that they took advantage of their son and betrayed his trust is disgraceful in itself. I'm truly sorry that this has happened to you Seth. Every time I have ever helped family out, and the number is very small, I look at it as a gift. If it comes back to me then it's a bonus for me. This is to hoping that your future RE ventures bring nothing but happiness and good fortune.
It was a nice gesture, but a costly one. Seems like you let business get in between personal problems. I would never rent to family, colleagues, or friends. After a while, they'll think you'll soften up, and let them get away with non payments because you're affiliated with them.
Family is Family, And Business is Business, And the two shall never mix, Especially those of us who are immigrants where our culture depicts that your extended extended extended family are as important as your nuclear family.
I do not rent to friends or family members who I can not evict, Simply because that is part of the rental business.
so it's unfortunate that a family member of your's took it that far with you, But if they did not consider that you were family and what they did put your business and future into jeopardy, Then it was totally okay to start the eviction process after 3months of late rent.
Best of luck.
Originally posted by @Seth Macomber:
I've heard it a million times, "never rent to family." Being the naive person that I was -- possibly still is -- I didn't listen.
I rented my condo out to a family member in 2013. By early 2014, I noticed their rent payments were becoming more and more sporadic. This concerned me. By August 2014, I told them it was time they find else where to live. After a heated reaction, they agreed. Fast forward to January 2016, they were still there and somehow amassed an incredible $15,800 of back rent. The only course of action I saw by that point, was to evict. It was the hardest decision that I made that day -- it was probably a Sunday, Sundays are slow days for decision making needs.
I called my realtor friend to get his thoughts, and I'm not sure if he was trying to be funny or not but he said, "that's why I always tell people never rent to family" -- part of me thinks he wanted to rub a little salt on the wound.
After months of going back between the lawyer and the courts, I received a Summary of Judgement today, and the tenants in my rental will be removed by law enforcement if they do not voluntarily vacate in 2 weeks.
I'm pretty bummed that it came this far. I am not sure if I have questions for anyone or if I am subconsciously searching for some comfort.
In any case, I had to let it out.
I think the bottom line here, after reading the replies, is the agreement. You did not offer to give free rent to your in-laws (from your definition of would-be parents, I'm assuming it's your in-laws?). They agreed to pay you, and they reneged on that agreement.
So, anybody saying you should feel bad or guilty, is being unreasonable, in my opinion. This is not you saying, "Hey, here's some property I own and I want to offer it to you to live in for free."
If the agreement was that they were supposed to pay you rent, and then expected you to ignore that and let them stay there for free - then they were weasels. End of story.
They are family; over time you will start rebuilding the relationship. As their son, you've done more than enough to understand and help them in their situation. Its hard im sure, but I can only imagine the stress this had caused yourself and your family. It is a business, so by not evicting them for that long, you shouldn't feel guilty that you finally did. There wont be a time to do it that will really make you feel, it was done right. And thats because they are family. Its very heavy right now but you'll feel a pressure lifted once they move out. However, you will also feel somehow responsible on how they end up after the move. Its normal. What I would recommend is if I may, stay firm with your decision but still be on the lookout for them--from afar at first. Can you find place(s) for them to move in, maybe suggest a place or two. Evicting them is different from abandoning them. You can still help them even if they live somewhere else. Because they are parents its hard for them to be on the wrong side of scenario. And as their son, move on and try not to stick it to them once these are all said and done. We all say the wrong things when are upset; so whatever you have said, move on and consider the eviction an end to those emotional and unpleasant battles. See and treat this for what it is and dont look at it worse than it truly is. There is no problem that has no solution we just need to be patient and resourceful. Goodluck!