Should you rent to a friend?

Cleveland, OH · Member since 2022 · 826 posts · 578 votes

Hey BP,

For those who have rental properties. Would you ever advise renting your property to a friend? What are some potential downsides here?

Please comment if you have any experience or advice. I have no plans to rent to any friends but I am curious.

Thank you!

Ben Sulka

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Adam Martin

Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes

Not if I wanted to keep them as friends, same recommendation for family. I keep my business and personal life separate and have declined family even though they were highly qualified because I’m not even putting myself in that situation and they understood.

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Adam Martin
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
4y
Not if I wanted to keep them as friends, same recommendation for family. I keep my business and personal life separate and have declined family even though they were highly qualified because I’m not even putting myself in that situation and they understood.
5 Reply
Forrest Williams
Real Estate Agent · Chicagoland · Member since 2018 · 314 posts · 199 votes
4y
In general, no. Sooner or later something is going to come up. They will be late on their rent, you won't fix something in a way they won't like, and it can all go up in smoke. Now you've got an angry tenant and one less friend.
5 Reply
Tommy Parker
Property Manager · Charlotte, NC · Member since 2022 · 269 posts · 135 votes
4y
I haven't rented to a friend before because I haven't gotten a chance for that to come up. However, I will say make sure everything is in writing. Make sure the lease is up to date the way you want it and that the expectations are clear. I would let the friend know that you have 2 hats. A friend and a property owner. So when making decisions on the property then you're wearing the property owner hat. I think if your friend has a reliable history then this would make it easy but if not I wouldn't have trouble even going there.
1 Reply
Matthew Bowling
New to Real Estate · Worcester, MA · Member since 2021 · 63 posts · 48 votes
4y
I've heard of people buying their first house in college and renting out rooms to their friends. I think house hacking is the only scenario this works in.
3 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Matthew Bowling:

I've heard of people buying their first house in college and renting out rooms to their friends. I think house hacking is the only scenario this works in.

My plan is to house hack for my first deal as soon as I graduate college in May of 2023.
I have no plans to rent to any friends though. Just curious on opinions.
Thanks for your response!
0 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Forrest Williams:

In general, no. Sooner or later something is going to come up. They will be late on their rent, you won't fix something in a way they won't like, and it can all go up in smoke. Now you've got an angry tenant and one less friend.

Agreed. Thanks for the response!
0 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Tommy Parker:

I haven't rented to a friend before because I haven't gotten a chance for that to come up. However, I will say make sure everything is in writing. Make sure the lease is up to date the way you want it and that the expectations are clear. I would let the friend know that you have 2 hats. A friend and a property owner. So when making decisions on the property then you're wearing the property owner hat. I think if your friend has a reliable history then this would make it easy but if not I wouldn't have trouble even going there.

Thank you for your response! That is excellent advice. I don't think I will ever find myself renting to a friend, but that is a great way to look at it.
1 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Adam Martin:

Not if I wanted to keep them as friends, same recommendation for family. I keep my business and personal life separate and have declined family even though they were highly qualified because I’m not even putting myself in that situation and they understood.

Good advice. I appreciate the response.
0 Reply
Angela Venger
Member since 2020 · 29 posts · 24 votes
4y
No, never do business with friends, sometime even family members.
2 Reply
Michael Wooldridge
Member since 2022 · 485 posts · 216 votes
4y
I’ve done business with friends and family all the time. They can be some of the best partners.
That said I only do business with some friends and family. Like anything in life you have to choose your partners carefully. And I’ve not known too many long term business partners who don’t become family/friends.

3 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Not unless you can be blunt with them. What happens if they trash the place or don't pay rent? Are you comfortable evicting them? Same with family. There are some family members I would rent to...others never.
1 Reply
Paul De Luca
Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
4y
Quote from @Michael Wooldridge:

I’ve done business with friends and family all the time. They can be some of the best partners.
That said I only do business with some friends and family. Like anything in life you have to choose your partners carefully. And I’ve not known too many long term business partners who don’t become family/friends.

Exactly, tons of businesses are family businesses. Sure, some don't work out but the same is true for non-family businesses. Personally I would rather run a family business with people I love and trust. I invest with my brother and would have no issue investing with my parents either.
If you invest with the wrong people, whether it's family or not, things are likely to go poorly. I have never liked the cliche advice of never investing with friends or family.
Personally I would not rent a unit to a friend though.
1 Reply
Mose Gebremeskel
Investor · Member since 2022 · 234 posts · 144 votes
4y
For me, it's a risky slope. Overall there's no rule to this but I would be mindful of the type of friend first. I wouldn't do it because of how sticky a situation could get.
1 Reply
Phil Haayer
Member since 2022 · 4 posts · 1 vote
4y
I rented out my house for 8 years to a good friend. It worked well for me. It is tough to have financial conversations with friends and making sure that both of your needs are taken care of. It really depends on how well you can have conversations with your friend and that your expectations and concerns are clearly communicated.
1 Reply
Nicholas Salman
Lender · OH · Member since 2022 · 113 posts · 77 votes
4y
Honestly, Ben, it's a really tough one lol. There's always the issue of them thinking they can get away with a little bit more just because you guys are friends and on top of it, that may be your good buddy but you most likely don't know exactly 100% how he lives his life etc. I would say there are always people looking for a place to live and you will most likely have more options, so don't settle just because you think it might be safe or whatever the reason. Look up dion talks and see his story of renting out to a friend and make your judgement after that.
1 Reply
Michael Wooldridge
Member since 2022 · 485 posts · 216 votes
4y
Quote from @Paul De Luca:

Quote from @Michael Wooldridge:

I’ve done business with friends and family all the time. They can be some of the best partners.
That said I only do business with some friends and family. Like anything in life you have to choose your partners carefully. And I’ve not known too many long term business partners who don’t become family/friends.

Exactly, tons of businesses are family businesses. Sure, some don't work out but the same is true for non-family businesses. Personally I would rather run a family business with people I love and trust. I invest with my brother and would have no issue investing with my parents either.
If you invest with the wrong people, whether it's family or not, things are likely to go poorly. I have never liked the cliche advice of never investing with friends or family.
Personally I would not rent a unit to a friend though.

I wouldn't look to rent a unit to a friend, frankly the only time I could ever see it come up is if one of them went through a divorce. In which case I wouldn't hesitate to with some of them.
But either way it's just like any other situation you have to be smart in who you partner or rent with.
2 Reply
Galen Ikonomov
Member since 2021 · 256 posts · 213 votes
4y
"This rule is so underrated... keep family/friends and business completely separated!". I am quoting phrase from Biggie Smalls song.
".... Man, I can't pay rent on time this month, you know it has been hard, because of X X X, but come on, we are friends."
0 Reply
David A Lisowski
Rental Property Investor · Inlet Beach, FL · Member since 2018 · 199 posts · 111 votes
4y
As others have said, I would also say, "No."
House hacking works on the first, maybe, second, but after that, you should only have tenants.
Friends as roommates will cease to be friends. Friends as tenants will cease to be friends.
Friends as business partners (providing a service) will neither remain friends nor partners (and probably won't really provide the service).
Networking, sure. Being friendly, most definitely.
Mixing friends/family with business, no go.
1 Reply
Michael Brattelli
Real Estate Broker · Medford, NJ · Member since 2018 · 236 posts · 177 votes
4y
@Benjamin Sulka HARD no for me
1 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Benjamin Sulka:

Be careful mixing relationships and business. If the business side goes south, you'll lose the relationship, too.
The DIY Landlord Book4.7247 Reviews
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2 Reply
Shane Kelly
Real Estate Agent · Cleveland, OH · Member since 2021 · 383 posts · 361 votes
4y
While I definitely do err on the side of caution, I think I would rent to friends when I house hack. I would make them qualify just as if they were a random tenant. I don't mean that I would run a background check on the person that I've known since kindergarten, but I also wouldn't rent to the friend who I know hasn't held a job for more than 3 months since highschool and has nothing to stand on. Circumstances matter, but I also so see the side of the argument that it's not worth the drama.
1 Reply
Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
4y
@Benjamin Sulka a friend in need is a friend indeed.
I would treat a friend like anyone else. Pass the screening you get the unit. Stop paying and you get evicted.
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1 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Paul De Luca:

Quote from @Michael Wooldridge:

I’ve done business with friends and family all the time. They can be some of the best partners.
That said I only do business with some friends and family. Like anything in life you have to choose your partners carefully. And I’ve not known too many long term business partners who don’t become family/friends.

Exactly, tons of businesses are family businesses. Sure, some don't work out but the same is true for non-family businesses. Personally I would rather run a family business with people I love and trust. I invest with my brother and would have no issue investing with my parents either.
If you invest with the wrong people, whether it's family or not, things are likely to go poorly. I have never liked the cliche advice of never investing with friends or family.
Personally I would not rent a unit to a friend though.

Thanks for your reply!
0 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Phil Haayer:

I rented out my house for 8 years to a good friend. It worked well for me. It is tough to have financial conversations with friends and making sure that both of your needs are taken care of. It really depends on how well you can have conversations with your friend and that your expectations and concerns are clearly communicated.

Good advice. Thank you for your reply
0 Reply
Benjamin Sulka
OP
Cleveland, OH · Member since 2022 · 826 posts · 578 votes
4y
Quote from @Nicholas Salman:

Honestly, Ben, it's a really tough one lol. There's always the issue of them thinking they can get away with a little bit more just because you guys are friends and on top of it, that may be your good buddy but you most likely don't know exactly 100% how he lives his life etc. I would say there are always people looking for a place to live and you will most likely have more options, so don't settle just because you think it might be safe or whatever the reason. Look up dion talks and see his story of renting out to a friend and make your judgement after that.

I will listen to Dion Talks! Thank you for the reply.
1 Reply

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