I know it is very common for people to rent their homes or apartments to friends. I suspect that like most things in life, 80% of those rental relationships do just fine. I probably just here about the 20% that do not. Here are some tips to making sure that you as the landlord (not as the friend) is protected if this friendship goes south and your “friend” becomes the bane of your existence!
- Many “friend” landlords simply let the tenant “friend” move in and just pay them some verbally agreed on amount of rent. WRONG! You need a standard written lease. This may seem formal, but this really protects both of you. With a written lease there is no opportunity for one party to remember the conversation differently. Plus, as the landlord, if the friend stops paying you or does something you disagree with, it will be difficult (but not impossible) to evict them. One example is a couple that let a brother rent this old house in the country. After about 6 months, the brother started paying parts of the rent every couple of weeks when they would hound him. He then started to remodel the house, plus he moved in a couple other roommates and they all had parties every weekend. Without a lease in place, these landlords had a terrible time getting this guy out.
- Keep a key to this home and install a 2nd one in a lock box that only you have the combination to. You can give out this lock box code to repair guys that need access to the property for repairs without bothering your friend.
- Do not allow your friend to be late on the rent. This will be worse than letting the average stranger tenant be late on their rent. You will get into this strange situation where you want to hang out with your friend, but will be frustrated when he is buying a round of drinks for the bar, all the time you know he owes you back rent.
- Consider putting your friend on a month to month lease. Then you can simply give him 60 days notice to move out if the relationship starts to sour. Then there doesn’t need to be an eviction involved (unless he doesn’t leave). You just part company from a housing standpoint and go your separate ways.
Renting to friends can be a great way to have a quick and most likely wonderful tenant. Just don’t leave all your landlord experience and common sense behind!