Buying property to rent to parents

Andy Foslin · 2025-03-07T05:05:10-08:00

Hi everyone - I'm a licensed Realtor in Tampa Fl. My ultimate goal has always been to obtain 5-10 properties just to gain the long term equity as I work (more than) full time and don't need the cash flow. A great opportunity came up as my parents are planning to move down here to sunny Florida in the next 9 months and want to rent for a while to get used to the area while they look for a permanent home. We discussed that I could possibly buy a home and have them rent from me. My worry is that my parents have a very high standard of living and it could force me into buying a more expensive house than I want, or that I could be buying a house that's not really tailored to my long term investment goals (for example my mom really wants a pool but I don't want to buy a rental with a pool because I know future renters wont take care of it etc) My gf is a little house crazy right now too so shes obviously pushing for very expensive forevor home to live in and I don't necessarily want to buy a forevor home (at least not right now) I want a great investment opportunity. Am I crazy for second guessing this potentially awesome opportunity or should I stick to something a bit more reasonable and in-line with my permanent rental goals?

Ke Nan Wang

Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes

1y

It's usually not wise to do business with family and friends even everyone's goals are aligned. Majority of the people don't have that kind of relationship and trust and a small misstep can ruin both the investment deal and relationship.

In your scenario none of the people's interest are aligned so my best advice for you is to keep everything separate.

You find your own investment property based on your criteria. Your parents rent/buy their home based on their interest and financial capability. And lastly you go find your next primary residence based on your wife's want (or how good are you at influence her decision to swing it towards your want).

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Doug Smith

Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes

1y

Hey Andy. I'm in Tampa as well. Personally, I would focus more on the long-term cash flow of the property rather than worry about your parents living standard. If we're financing rental property, we're going to focus on your credit, the amount of $ you're bringing to the table, and the cash flow of the property. Will the monthly PITI, HOA, maintenance reserve costs, etc be more or less than the rent that you would garner from an arm's-length transaction with a non-family borrower. You said it yourself in your post. Your parents will only be temporary tenants and you have to think long term. At the end of the day, don't get to "house crazy" as you put it. Real Estate Investing is a math problem...period. When you let emotion enter into it, that's when you lose $, so ingore the high-standards that your parents have and seek properties that cash flow positively and have a potential for appreciation. Let's grab coffee some time in Tampa.

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Jorge VazquezBusiness Member

Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 684 votes

1y

Hi Andy, You are absolutely right—don’t do it. This situation has "disaster" written all over it. You’ve got to weigh the real pros and cons here. What would your parents bring to the table that a well-qualified tenant with a solid history of property care and timely payments wouldn’t? The answer: not much. The benefit of a regular tenant is that you can keep emotions out of the business, which is crucial because mixing family and money can be a recipe for disaster.

When it comes to choosing the right property, focus on the “high end of the low end”—a solid Tonka property. You don’t need luxury countertops or upgrades that won’t boost your cash flow or rental return. Rookie investors often over-improve properties as if they were living in them, which only hurts the bottom line. Stick to what’s needed to get top rental value, nothing more.

And about your wife—been there! I went from 0 to 32 homes by having open, strategic conversations with my wife. Before getting married, we agreed to house hack our way to 10 properties. Once we hit that goal, we sold the property with the most equity to buy her dream primary home. Setting clear expectations early on saved us a ton of stress and kept our investment goals on track.

Here to chat if you need any more advice!

Jorge

Graystone Investment Group4.6268 Reviews

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Buying property to rent to parents

Buying property to rent to parents

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