Leasing to COWORKERS

Member since 2022 · 3 posts · 2 votes

They say never work with family or close friends... what about coworkers?

I just acquired a property with a nice yard and playground. I am going to house hack one unit and rent the first floor out. I think a small family would make a great fit.

I recall a young coworker expressing to me that him and his wife are looking to get their own place(not sure if they're set on purchasing or willing to rent). Considering they have a young daughter I actually think this could be a good property for them! The location is great for his job

Is it a good move if I reached out to him and offered a lease to him? It would save me the hassle of screening tenants(I would still screen him and his wife of course)

This may be a stupid question, but does it matter if I tell him in the Landlord or not hahaha.

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Caleb Brown

Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes

I would screen as usual. The tricky part with renting to friends, family or coworkers is often owners let things slide they wouldn't have with a stranger. Also that tenant is more likely to ask for favors or use the relationship as leverage (not saying all will). If something goes bad it makes it awkward. If you handle it as normal applicant where you screen and make the expectations clear then it should be fine. If they don't qualify I would be leery of still leasing.

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Michael K GallagherBusiness Member
Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
4w
hey @Ethan Goletz you describe wanting to house hack it and rent out the first floor? I assume this is a separate unit with separate entrance correct? If so that sounds like a great set up.
You'll want to check with your local laws and regulations about telling them you are the owner, but unless you purchased it in an LLC they could simply look up the public record.
I think it depends on your relationship with the person, but if you want to give them an inside track on the property and offer it to them, as long as you go through all the same application and keep everything "above board" and in writing things can be pretty smooth. Its when hand shake and leaseless deals happen that things get complicated.
My hot take is that if the tenant knows you as a coworker and knows that you are the owner, pending you're not a horrible landlord and keep up your end of the bargin, I think it leads to a situation where the tenant is less likely to be late or damage the place because they have a relationship with the owner but that's just my take.
But as long as you still have them do the standard application, you want to do this for fair housing and to not be open to liability there, and put it all in writing i think it could be a great situation, as long as you trust your employer to keep you both employed cause you're essentially relying on that one employer for the entire properties payment.
[email protected]614-362-2231
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
4w
Quote from @Ethan Goletz:

They say never work with family or close friends... what about coworkers?

I just acquired a property with a nice yard and playground. I am going to house hack one unit and rent the first floor out. I think a small family would make a great fit.

I recall a young coworker expressing to me that him and his wife are looking to get their own place(not sure if they're set on purchasing or willing to rent). Considering they have a young daughter I actually think this could be a good property for them! The location is great for his job

Is it a good move if I reached out to him and offered a lease to him? It would save me the hassle of screening tenants(I would still screen him and his wife of course)

This may be a stupid question, but does it matter if I tell him in the Landlord or not hahaha.
Hey Ethan, I don’t think there’s anything wrong with offering it to a coworker, but I’d treat him exactly like any other applicant. Same screening criteria, lease, security deposit, rent collection, late-fee policy, maintenance process, and expectations from day one. The biggest risk with renting to someone you already know is becoming too flexible because you see them at work every day, especially since you’ll also be living in the property. I’d definitely be upfront that you’re the landlord too. No reason to create an awkward surprise later, and it sets the relationship up as professionally as possible. If he qualifies under the same standards you’d use for a stranger and you’re comfortable enforcing the lease if something goes wrong, I wouldn’t rule him out just because he’s a coworker.
[email protected]614-300-7535
Jimmy Lieu, Red 1 Realty4.9120 Reviews
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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
4w
I would screen as usual. The tricky part with renting to friends, family or coworkers is often owners let things slide they wouldn't have with a stranger. Also that tenant is more likely to ask for favors or use the relationship as leverage (not saying all will). If something goes bad it makes it awkward. If you handle it as normal applicant where you screen and make the expectations clear then it should be fine. If they don't qualify I would be leery of still leasing.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
4w
Avoid if possible as if something goes wrong it will ripple into the work relationship.
[email protected]248-209-6824
Logical Property Management4.9450 Reviews
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