Renting to Friends and Family: Seeking Your Experiences

[Jessica Privitera]

Hello Fellow REI,

I wanted to share some of our recent experiences and seek your insights on the topic of renting to friends and family. Currently, we own a rental property where both a family member and a close friend are tenants. Here's our situation:

1. Close Friend as Property Manager:
   • Agreement: Our friend agreed to manage the property in exchange for a below-market rent since we live out of state.
   • Issue: We recently discovered the property was neglected during past winter snow storms, turning the parking lot into an ice rink, creating a huge liability.
   • Result: The property manager, who lives on the property, neglected maintenance and communication. We've since increased their rent to market rate, and now we're experiencing late payments.
2. Family Member as Tenant:
   • Issue: Our family member is behind on rent for more than 5 months, with a rate below market due to their relationship with us.
   • Behavior: They have made excuses about financial struggles, yet have been seen treating their new girlfriend to fine dinners and outings.
   • Impact: Both tenants consistently pay late and have shown complete disrespect to us, the property owners, despite efforts to ensure their happiness and success.

We'd hate to impact our relationship with them, but right now, they're hurting us and our pockets. 

My question to you all is: have you ever had to deal with situations concerning family and friends not fulfilling their respect for you and your property as tenants? How did you deal with it?

What is your advice moving forward? We're afraid it will hinder our relationship in the future.

We're looking forward to your stories and advice!