Renting a Home to a Friend: How to Keep Everyone Happy

If you talk to experienced landlords, most of them will advise against renting a home to friends or family members. In some cases, though, you want to help a loved one out. Leasing them your property is the perfect way to do it. If you choose to go this route, how do you protect your interests while also keeping your relationship with your renter intact? While you’re right if you think it sounds difficult, it can be done.

The Landlord/Friend Dynamic

When you’re renting a home to a friend, you’re in the midst of a unique set of circumstances. Not only do you have all the typical responsibilities of a landlord, but you’ve also got the responsibilities of a friend. This can make it difficult to find a way to protect your own interests without also damaging the friendship.

This is especially true if you’ve been a landlord for a while, and have an established set of expectations and standards that apply to your renters. Fortunately, there are ways to route around this seemingly complex dynamic and make the landlord/friend dynamic work for everyone.

5 Tips for Renting a Home to Friends

If you’re going to rent your home to a friend, follow these five tips to keep the rental situation happy and healthy:

1. Draw up A Contract

You wouldn’t rent to strangers without a lease agreement, and you shouldn’t rent to your friends without one, either. Even the best friendships can go south, and you want to make sure you’re protected if that were to happen. Even if your friendship stays intact, it’s not worth putting yourself or your financial well-being at risk simply to prove you trust your friend’s goodwill.

2. Don’t Give a Break on Rent

If you slash your previous rental rates because you’re letting your friend live in the house, you’re likely to wind up resentful down the road. Instead of putting yourself out like this, keep your rental rates reasonable and based on current property values in your area.

3.  See a Real Estate Attorney

Contracts are critical when it comes to renting a home to friends, and a good real estate attorney can help you ensure that your contract protects you and your friend in the rental agreement.

4. Keep the Lines of Communication Open

If you and your friends don’t communicate openly about this new rental agreement, things are very likely to go downhill. With this in mind, keep your communication open, flowing both ways, and professional at all times.

5. Consider Hiring a Property Manager

If you don’t want to be the one who gets called when your friend needs the stove fixed or the furnace cleaned, hire a property manager to handle these situations. This can be helpful to put some distance between you and your renters and may go a long way toward keeping your friendship intact.

Happy Renting, Healthy Friendships

While renting a home to a friend isn’t without its challenges, it is possible. Following these guidelines can help ensure that your rental arrangement works for both you and your new tenants.