Friend becoming a Tenant

44 Replies

Hey guys!

Wondering if I can get some feedback. My fiance and I are brand new investors and we've decided to house hack our 3 bedroom house. My first tenant who is also my friend  will be moving in at the end of the month. This is my first time doing this. Should I print out a generic landlord tenant form online? or do I need get an attorney to make a specialized contract? If so how much do attorneys normally charge for something like this and where is the best place to look for one? Also any tips in general for managing a friend who will become a tenant is most helpful! Thank you!

Originally posted by @Dale Abella :

Hey guys!

Wondering if I can get some feedback. My fiance and I are brand new investors and we've decided to house hack our 3 bedroom house. My first tenant who is also my friend  will be moving in at the end of the month. This is my first time doing this. Should I print out a generic landlord tenant form online? or do I need get an attorney to make a specialized contract? If so how much do attorneys normally charge for something like this and where is the best place to look for one? Also any tips in general for managing a friend who will become a tenant is most helpful! Thank you!

 No no no no no no no no no no no no no no no. Do not rent to friends. Don't do it dude.

Hi @Dale Abella .

I wouldn't over-analyze this scenario.  As @Sara C. pointed out with the BP leases above; that should suffice.

I never had my friends on leases because you hoped there is a level of respect between each other.  Friendship first; which might require them moving out before the 'lease' to preserve the friendship.

Also, be prepared when your friend has questions about the lease.  "Do you not trust me? I thought we were friends. This isn't a business.  Etc."  Make sure you explain why a lease is important and how it protects both parties.

Use the BP lease but like others said, explain that the lease is too protect you and your friend and only be used when diplomacy fails. Hopefully you don't post "Ex Friend becomes Ex Tenant" in your future.

Fortunately I use property managers.  I've had several family members ask if they could rent one of my properties.  I always refer them to my property manager.  Strangely not a one has ever contacted the property manager.

Dale Abella

Renting to a friend is not a very good option. The landlord-tenant relationship will not be taken seriously by both the landlord and the tenant. If you would still like to rent your space to your friend it is better that you draw up a lease. Sit down with your friend, have a discussion and then get the agreement finalized.

@Dale Abella hey Dale! I’ve been through this exact situation. As long as your upfront about expectations (and DON’T rely on assumptions) and have a contract things so go pretty smoothly. I got a generic contract from online and modified for my own taste and I didn’t that with 6 different tenants over the years with no real issues. If you would like a copy of the contract I used, just let me know!

My first ever tenant was my cousin and her husband. I had seen multiple times not to rent to family/friends but i did it anyways. Horrible decision. I was cool with the guy beforehand but as soon as he became a tenant, things went sour. Picky Picky Picky. I had to non renew the lease at begging of this year. 

I had a vacancy come up on another one of my rentals and i posted it. My  buddy hit me up and wants to rent it. I flat out told him no, that business was business and friendship was friendship.

@Dale Abella

@Dale Abella , if I understand correctly this is more of a 'roommate' than 'tenant'.  They'll be moving in with you and your fiance.

Most of the replies seem to think they will be a tenant, which is pretty different.  A lot of young investors have their friends as roommates when they first start.  A lot of first time homebuyers I know have their friends as roommates.  Almost every person has had a friend that was a roommate at one point in their life, difference is you own the place.

It's important you have a conversation about what are 'landlord' expenses vs. 'roommate' expenses.  Waterheater goes out: landlord.  Clogged sink because somebody put grease down the sink: roommate(s).  It's best to have that conversation before anything happens.

If this is a roommate situation I think you'll be fine as long as you have a written agreement.  I'm still friends with the friends I roomed with.  If this is a standard landlord/tenant then no. Either way be careful and accept that you may not be friends if this goes sour. Of course, you may not have stayed friends anyway. 

@Dale Abella The important thing to remember in this situation is that although he is your friend, you are also his landlord and he needs to follow all the rules and regulations provided in the lease. You can visit Law Depot for state specific leases - make sure you do get a lease from a reliable source instead of just creating one on your own. Some people have great success with renting to people they know and others can find it challenging - just be prepared for all the different situations that could arise from renting to a friend. Best of luck!

@Dale Abella I had some family in laws just move out of my house after living there for 4 years. They did a few minor things to the house that they didn’t tell me about but took care of any maintenance issues for me along the way and went pretty well. They had 2 kids and 2 dogs there so there was more cosmetic damage than I would’ve liked but getting all that taken care of this month and have it already leased to one of my good friends for a year coming up in August. My first experience with family went well and see my 2nd experience now with a friend going well too. As long as you both are clear on everything and treat them as you would a normal tenant I don’t see the problem. Now I do have plenty of family members and friends that I know I would not rent to as well so I can see both sides on the matter. Best of luck to you.

Originally posted by @Maugno M. :

My first ever tenant was my cousin and her husband. I had seen multiple times not to rent to family/friends but i did it anyways. Horrible decision. I was cool with the guy beforehand but as soon as he became a tenant, things went sour. Picky Picky Picky. I had to non renew the lease at begging of this year. 

I had a vacancy come up on another one of my rentals and i posted it. My  buddy hit me up and wants to rent it. I flat out told him no, that business was business and friendship was friendship.

@Dale Abella

 Yessir. We've all been there, and like you we all learned the hard way.

I agree with most of the posters. Renting to a friend is the same as lending money to a friend. It has the potential to destroy the friendship. Having said that, if you decide to go ahead, i would definitely have a written and signed agreement. As my mom always said, a verbal agreement is not worth the paper it is written on. The benefit of having it in writing is that it makes it clear to both parties what the terms of the agreement are. Niether one of you can come back 6 months later and say, I never said that, or I never agreed to that. 

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