Help!!! Would you rent to friends or family?

Question

Hello everyone I have an interesting situation that I need some help with. My best friends parents just had to move due to there home having major code violations and them finding mold. They would probably not be my fist choice as a renters. They are currently living in a hotel and I feel badly if I say no. I try and tell all friends and family I won’t rent to them but this seems like a little bit different circumstance. Would you rent to your best friends parents? Would you treat them like any other tennant and screen accordingly? Another part to the story is y friends dad has helped with the rehab of this unit as well. Any suggestions or help would be much appreciated🙏.

Thank y’all in advance.

Kyle J. · Answer

@Sean Moore  I've actually been asked this before.  I've also been asked (just recently) by a good friend who I've known for over 3 decades if I would consider loaning him money for a business venture (non real estate related).  In both cases, I said no.  Here's was my thinking and how I explained it.

Rather than asking yourself, would you rent (or loan money to) a friend.  Ask yourself, are you capable of doing so and treating it like a normal business relationship, including utilizing all available options/remedies if things go bad?  Meaning if rent doesn't get paid or money owed to you isn't paid back, are you willing to file for eviction or sue like you would with any other tenant/person?  And then ask yourself, are you also willing to risk losing your friendship with the person?  Because one way or another, if things go bad, you will no longer be friends.  They'll either be mad at you for evicting/suing, or you'll resent them if you don't because you'll feel like they took advantage of you (not to mention they likely owe you a bunch of money which never sits well with most people).

Ultimately, in my case with my friend of 30+ years who asked to borrow money for a business venture, I told him no.  I also explained to him that my answer was no because I valued our friendship too much.

It's not that I'm against loaning money or renting properties.  Afterall, I'm a landlord and I've also loaned WAY more money than my friend was asking for to other people I knew for far less time than him (but that was business and not based on friendship).

In your case, it sounds like you'd be LOWERING your standards (since you said these would not be your first choice as tenants) AND potentially putting your friendship at risk.  Personally, I just don't see that as a good idea.  If it were me, I wouldn't do it, and if asked directly about it I'd just tell my friend that I valued our friendship too much to put it at risk.  Hence the reason I have a policy to not rent to friends (or their parents).

Just my two cents.  Others may have different thoughts.  Good luck with whatever you decide.

Jaron Walling · Answer

In this situation I'd go with my gut feeling. No.

It sounds like the word risk surrounded by the word RISK.

Canesha Edwards · Answer

@Sean Moore

Hey Sean,

I try to avoid doing business with friends and family all together because things always seem to go bad. However, I do understand your problem. So, here’s my 2 cents.

I would treat them like any other tenants, charge the regular rent amount, etc.  Don’t change anything about how you would normally do business.  Just my opinion.

Best,

Canesha

Matt M. · Answer

@Sean Moore

This is a big no..

another reason why we only tell family/friends that would never need to rent from us that we even have rentals.

Our kids and parents don’t even know..

Sean Moore · Answer

@Canesha Edwards @Jaron Walling @Kyle J. Thank all of you so much for the help! I called yesterday and informed him I would now be comfortable with renting to friends or family. All of your help really gave me the courage to have that tough conversation.

Caston Binger · Answer

I wouldn't. Could be problematic in the long run. Not always the case, I'd avoid it if you could. Just find someone else.

John P. · Answer

I was a strong "no" until you said: Another part to the story is y friends dad has helped with the rehab of this unit as well. To me that changes the equation and I would say yes but with a written lease, security deposit, etc....

Casey Coleman · Answer

Nothing long term. Rent a place to them with a weekly rental rate with a defined move out date with possible extensions. Enough time to find a place. Just explain to them that you don’t want to rent to family/friends, trust me you don’t! Require them to rent a storage unit to store the majority of their possessions so it’s an easy move out for them, just let them have the bare necessities. Have an attorney right up a short term lease, with everything that needs to happen. Do a credit check also, if they have a poor credit score they will not pay you.  I would insist that they pay the attorney fees if you do this, a few hundred buck can save you a lot of headaches.  If they agree move forward. I would also ask that the son also signs the lease, so that when the deal goes bad and it will, at least he knows the deal and will still be your buddy. If you do a deal and it goes bad, you will loose your best friend. You will be a hero when they move in, and a devil when they don’t pay and are forced to move out. To be honest, I would help them find a place, possibly even help them with the security deposit. I’ve rented to family before and learned the hard way, you have a person that knows construction and can easily destroy the place in a few hours with a hammer and a sawzaw. I guarantee that when they don’t pay then rent, their reasoning will be that “ I helped you getting this place fixed up”. Yes you could sue them and wait years to recoup the money. here is what I recommended. Get involved and try to find a place for them to rent. Why can’t they move in with their son short term? Or do you have an extra bedroom for them to stay short term? When it comes to family/friends, they are the first person to screw you. Your going down a path that you will loose your best friend and loose thousands of dollars in rent and possible damages.

Eric Gerakos · Answer

No.

Joe Splitrock · Answer

Did you accept free help from your friends dad for the rehab work or did you pay him? Free help means you owe him one, unless you are a selfish. If you paid for his help, then you owe him nothing.

In general it is a bad idea to rent to friends and family. Things go wrong and then you are stuck. If they stop paying or trash your place, you have the choice of going after them legally, but you lose your best friend. No matter what your friend says now, when the sh1t hits the fan, he will expect you to put up with his parents crap and hold it against you if you don't. Just say, sorry I have a firm policy on not renting to friends or family. I value personal relationships too much.

Help!!! Would you rent to friends or family?

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