Would you rent to people that work for you?

Question

Hey guys just wanted to get some advice about people that work for me.

We have been remodeling a duplex I own and they have been asking if they can rent them out once I’m done. My first reaction is don’t mix business! But wanted to ask and see what others thoughts are

Nathan Gesner · Answer

Just tell them your policy is that you will not rent to anyone you have an existing business relationship with. If you agree to rent to them, how will you handle shoddy or incomplete work? What if they move in and you want to use them for future jobs, but they suck as tenants?

It's the same problem when renting to friends or family. If they don't work out as renters, you lose the renter and the relationship. You're also far more likely to get pushed around than you would by a complete stranger.

Jonathan Greene · Answer

It would be pretty hard to say thanks for fixing up this duplex for me, but I don't want to rent to you. If they are qualified, it seems like a win. Just put them through the same vetting system that you would anyone else, using NTN or something else, and see where they fall.

Ben Lin · Answer

If they are good people, you should definitely consider it. At the end of the day, good people will be good tenants and they will respect your property.

@Jonathan Greene I second your opinion.

Bruce Woodruff · Answer

Something in my gut says no. It could get messy (them expecting favors because you have a relationship).

Linda S. · Answer

@Bryant Blackwelder

As someone who has done this in the past-- I wish I didn't.

Sure, he paid-- but towards the end when he bought his new house he got crappy-- we didn't charge him a deposit because I trusted he would repaint it when he moved (spoiler-- he didn't!), and ruined what was once a great friendship.   It's hard to respect or want to hire someone who craps on you for being nice and renting to them.  Also, when you see how someone actually lives when they move out, it's disgusting, even for "clean" people.   He was our first worker, really bright kid,  he knew so much as far as flooring/painting/etc...  wish I would have said no!

If you consider this person a good worker and want them long-term-- I'd say absolutely not.    It sounds counterintuitive, but people change.. keep business--business.

Zachary H. · Answer

@Bryant Blackwelder

We did this with one of our employees. Wasn’t terrible, but we made a policy against it from now on.

Like everyone else has said, it just makes it hard on the tenant relationship and on the employee relationship.

I recently built a duplex and had one of my carpenters ask if he could rent it, the other carpenter (who rented from me before) told him it’s a bad idea! Haha

Make it a standard that you don’t rent to family, friends, employees, or anyone you have prior business with and it will help save you a lot of trouble.

Justin Lee · Answer

The positive part is that you know when they get paid, Might could even work it out to take out rent from their pay before they get their check.

Celine Crestin · Answer

I would consider them, but I would screen and qualify them first the same as I would any other prospective tenant. If they are well qualified, I agree, that's a slam dunk. I would certainly give them the opportunity to apply.

Scott Johnson · Answer

Lean 100% on your property manager (and if you don't have one get one for this). If they know you own the unit tell them that you've signed away all management rights to the property manager and that what they say goes. If they ever come to you trying to get special treatment or complaining, point them in the direction of the property manager.

It may turn out great if you manage it yourself, but that's just how I would play it.

Joe Splitrock · Answer

This is a tough situation, because they may expect special treatment based on the business relationship. They may think you will just approve them, since you know them. They may expect you to be flexible on rent or other lease terms. If you have a problem, it could affect your business relationship. Maybe you increase rent and all the sudden your subcontractor increases their rate. They just tell you, "cost of living is going up".

On the flip side, it could seem unfair to them that you are unwilling to consider their application. If you do entertain their application, explain to them up front that they would need to follow the same standards as other tenants. I would even consider building rent increases into the lease agreement, so they are not surprised later. It is best to over communicate your policies in this case, being clear that things like late fees are non-negotiable.

Most people will be good tenants, so this can definitely work out. Just be careful with screening and setting the right expectations.

Would you rent to people that work for you?

Would you rent to people that work for you?

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