Updated over 6 years ago on . Most recent reply
Renting to Friends/People You Know
Pros and cons of renting to people you know? We have some interest from a few acquaintance/friends about our rental. We’re building a business and this is our first owner occupied duplex. What are some tips to keep things professional? Situations to watch out for?
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When I first got into rentals I took a one day class at the local college called "Managing Rental Property". It was taught by the president of the state apartment rental association who'd been in the business for like 30 years. I kid you not, the very first thing she said was "Don't ever rent to friends or family." It was my number one takeaway from that class. It rarely (if ever) ends well.
I've found that some people still want to do it though. If you're one of those, then my next best advice would be "Don't rent to friends you're not willing to lose." Because things will likely go bad at some point, trust me. Like when you have to raise the rent and they start to resent you because they know you're going on vacation. One has nothing to do with the other, but they'll think they're paying for your vacation. Or if they stop paying you rent and you the "cold hearted" landlord have to evict them (how could you, after all, you're friends and you should give them a free place to live), it's not likely you'll remain friends after that.
Personally, I don't think there's any advantage to renting to friends. Only potential disadvantages.