House Hacking with Friends and Family

House Hacking with Friends and Family

Investor · South Florida · Member since 2020 · 33 posts · 35 votes

I recently bought my second house hack in October 2022. My roommates/tenants are my mother (recently divorced), my sister (over night nurse, who spends most days at her boyfriends), and a coworker I have known for years. Before buying the house everyone knew the terms and what the living situation was going to be. My friend just recently came back from Colombia (within a week of this post) and I did not charge him while he was away. Everyone knew this. Upon his return my mother and sister have both asks if rent would be the same amount because there was an extra person paying now. I thought this was a little odd to ask and was not sure how to go about it, so I told them that it was the same and I did not really expect to change it. Neither of their quality of life has changed, I volunteered to give up space to accommodate the additional person. So my two questions are, Was it a reasonable question for them to ask does the rent change when they knew he was eventually moving in? Should I lower the rent amount since there is an extra person now? 

Rent is $1100 each and the mortgage plus HOA comes out to $3300. I have been covering utilities.

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Laura ShinklePro Member
Realtor · Charlotte, NC · Member since 2017 · 357 posts · 292 votes
3y

Living with family and them paying you rent can be a very tough situation. It's hard to walk that line of son/brother and landlord. 

1. Is the lease in writing? Having it in writing may signal them, in a way they haven't thought about it, that you're their landlord and that this is legit, not just a random idea you came up with. It'll also show that there are guidelines for this relationship (landlord/tenant) so that the expectations are set up front. No one wants to pay rent, and tenants, regardless of being family or not will try to get any opportunity they can to lower and/or not pay rent. 

2. Since the situation was clear from the beginning (ie the 4 of you in the house), then I don't think you should lower the amount. There were expectations set up front, and nothing has changed other than you being nice and not charging rent while the 4th person was out of town. 

3. Rent isn't set by your expenses. Rent is set by the market rate for that room/living space. Just because the mortgage/HOA comes out to $3300/month doesn't mean that's what the rent needs to add up to. Do some research on roommate situations in your similar area to see if you're charging too much/not enough/just right.

4. Rent is rent, regardless of whether they're on vacation or not. Always have the same standards for all tenants. If you give a little to one, everyone will have their hands out. 

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  • Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes
    3y

    It can be tough living with friends and especially family as they expect breaks on rent or for you to be lenient. I don't know if I could do it haha. I have also house-hacked my primary and living with someone but he is not family or friend and we keep it to a business relationship. If the terms were clear before moving in, I wouldn't lower the rent but you got to decide for yourself and how much headache it may cause. 

  • Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    3y

    You're running a business.  Your investment partners are thinking like business investors. If you're the GM of this business, you need to respond like one and that includes this:  why did you not charge the tenant while he was not at the property?   Let's face it, tenants pay rent whether they were living in the property every day or not.  So what does your lease with the tenant (your friend) say.  Then provide your partners with an answer that is 'business-minded' - not based on a friendship.

    It may be that:

    'This was a one-time accommodation to someone who has been a long-time tenant and will continue to be.'

    'I should have charged rent but chose not to as to retain the tenant.'

    'This was an arrangement that was made upfront with him for this specific time frame.'

    And, know this:  you don't have the right to determine if your partners were negatively impacted by your decision.  Again, they are thinking like business investors (there is someone who was committed living space and who has not paid for that committed space that could have been rented to someone else to provide additional income.)'

    Run your business and provide your partners with business updates and explanations - not 'he's a friend' excuses. Their money is in this too.

  • Laura ShinklePro Member
    Realtor · Charlotte, NC · Member since 2017 · 357 posts · 292 votes
    3y

    Living with family and them paying you rent can be a very tough situation. It's hard to walk that line of son/brother and landlord. 

    1. Is the lease in writing? Having it in writing may signal them, in a way they haven't thought about it, that you're their landlord and that this is legit, not just a random idea you came up with. It'll also show that there are guidelines for this relationship (landlord/tenant) so that the expectations are set up front. No one wants to pay rent, and tenants, regardless of being family or not will try to get any opportunity they can to lower and/or not pay rent. 

    2. Since the situation was clear from the beginning (ie the 4 of you in the house), then I don't think you should lower the amount. There were expectations set up front, and nothing has changed other than you being nice and not charging rent while the 4th person was out of town. 

    3. Rent isn't set by your expenses. Rent is set by the market rate for that room/living space. Just because the mortgage/HOA comes out to $3300/month doesn't mean that's what the rent needs to add up to. Do some research on roommate situations in your similar area to see if you're charging too much/not enough/just right.

    4. Rent is rent, regardless of whether they're on vacation or not. Always have the same standards for all tenants. If you give a little to one, everyone will have their hands out. 

  • Ryan ThomsonBusiness Member
    Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    @Immanuel Pierre did they sign a lease? If so, what does that say? If not, I would get them on a lease. Make them feel like you are running a business

    The Assumable Guy544 Reviews
  • Real Estate Agent · Fort Pierce, FL · Member since 2022 · 44 posts · 11 votes
    3y

    Good on you for renting out to the family. I really don't think I would be able to do that. I personally do not like mixing family with business. For this reason exactly. I would suggest that if the terms before them moving in and paying rent were that this other person was coming... was there clear talk of the rent being the same. The best thing I think you can do is what Immanuel said... If they are not on a lease. Make one. BP has lease forms that they can fill out. This is your business and they should treat it that way. 

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