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General Landlording & Rental Properties

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Eric Samuels
  • Investor
  • Philadelphia, PA
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59
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Should I rent one of my units to one of my closest friends?

Eric Samuels
  • Investor
  • Philadelphia, PA
Posted Jun 10 2024, 11:32

Hey everyone,

So I have a duplex in Fishtown and I just accepted a section 8 tenant for my upstairs unit at $2483/month. The downstairs unit (1 bed/1 bath) I'm currently living in but I need to move back to Los Angeles at the end of the month. I have an option to rent to a close friend of mine but from a screening standpoint I don't know if his financials are there. My mortgage payments are currently $2,841.40/month and my property management fees are 4% (I'm striking a deal with a property manager I trust so I'm super thankful for them giving me such a low rate). The first unit needs a little work but I think I could rent for $1000/month in general and that is what I told my friend I would rent to him at.

He hasn't submitted an application because he told me he's trying pay off some overdue parking tickets and just wants to be in a better financial spot before committing. He has also mentioned that his job has been paying him late here and there. He's a driver so also stays in hotels often and isn't at home as much as other people.

One benefit of me renting to him is that I was going to leave most of my stuff in the unit to rent furnished and will grab what I am ready to take slowly. He doesn't really have too much of his own stuff given he's renting a small room somewhere else. Otherwise I'd need to move all of my stuff out immediately and most likely pay for a storage unit if I rent to someone else.

Also important note here is that I lost my W2 in January and have been applying HARD. I'm in a final round with a company but steady income has not been secured yet so if I could at least cash flow that would really help me stay afloat for the time being.

Obviously I could market the unit as-is and potentially rent to someone but won't likely be able to rent to a section 8 tenant which I was hoping for down the line.

I was considering starting off with 3-month leases with auto renew and I have been VERY clear with him that if he is unwilling to pay on time that I still am treating this as a business and am not afraid to evict him. I know that it will never get to that point but I wanted to establish that verbally.

Realistically, once I leave it's not like I'm going to be getting rent for that unit anyway so if he's late I won't really consider it the end of the world.

Would love to hear people's honest thoughts.

Thanks,

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