landlord experience for friends renting rooms?

Question

I am looking into buying a 3-4 bedroom property and having friends / co-workers rent the additional rooms. I would be living in the property as well. I would have them each sign a lease to ensure terms are laid out. My long term goal is to own multiple rental properties. Would the situation described above be considered "landlord experience" when I go to finance additional properties?

Thomas S. · Answer

Never ever, ever rent to family or friends and defiantly not to co workers. It is a recipe for disaster.

If you are looking to have no friends, family wars and added work place stress go ahead otherwise screen and select applicants only from strangers.

Kim Meredith Hampton · Answer

Same as @Jeff B. never rent to family or friends. I get at least one or two calls a month from an owner who has done this, and I need to come in and untie al the knots, act like the bad guy and evict them, never a good scenario

Jeff B. · Answer

I've rented rooms in my home before.  However, I never rent to family or close friends - - imo, make that a concrete policy.  WHY?

There's a strange physiology with close associates; "they will understand and cut ME some slack".  Third parties never make this assumption and you don't care about how they view you when you need to get tough!

Marcus Hendren · Answer

@Brett Nissen

As with anything complicated, I think the answer is 'it depends'. For me, landlord experience for funding never came into play until buying my 4th SFR when I couldn't qualify for conventional financing any longer. The lender was B2R finance (side note: don't ever use them) and one of the stipulations was that I had 2 years of landlord experience. I was a couple months short and was forced to take a 5 hour property management course from a third party. Hope this helps!