Tip #21

Don’t Rent to Friends

Written on January 16, 2013 by , updated on June 8, 2014

Renting to Friends

Just don’t do it.

It may sound like a good idea, but it will change your relationship for the worst.

There are rare instances where it *could* work, but most of the time, it won’t play out well. If anything goes wrong (and it will), you’ll be lucky if you can even stay friends after the dust settles.

Often times, friends will subconsciously expect leniencies because of their close relationship with you. To be your friend’s landlord creates a conflict of interest.  You have to be professional – and typically, friendships by nature are anything but.  Not to mention your financial portfolio is at stake!

If you value your friendship, you should either let him/her stay in your property for free (if you have the financial means to), or simply deny their tenancy.

Simply respond:

Hey    friend’s name  , I would love to help you out, but I have a policy that I don’t rent to friends or family.  If you’d like, I can help you look for another place.

photo credit: adamfarnsworth via cc
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27 CommentsLeave a Comment

  • Ms. Shawn Roman

    Another awesome article! I have made the mistake of renting to a coworker who is now trying to take advantage of the situation. I have never rented to a friend or family member, until 3 years ago, and won’t ever again!

    • Lucas Hall

      Yeah, it rarely turns out well. I wish it weren’t true.

    • J. brown

      I made the mistake of renting to coworker/ friend as well and it was the worst mistake of my life. I found they feel they can talk to crazy, bully you, and attempt to intimidate with blacking mailing you. When that doesn’t work, run around lying and twisting things at workplace. I told the tenant they can just leave and I ill give the money back to them, they claim I ruin there life.. I have even allowed them to stay rent free for 1 1/2 month.. they are still ungrateful and feel I owe them life. . I am just ready to move on.?

      How did your sitution work out?

      • Lucas Hall

        My situation wasn’t quite as dramatic, but even so, we aren’t friends anymore. Everything was fine until they damaged the carpet and I had to replace it in the living room. The carpet was brand new when they moved in, so I charged them for almost all of the cost to replace it. They just couldn’t understand why I wouldn’t waive the cost because we were friends.

  • Kerryn

    I’ve had a friend ask to rent one of our properties, and try and get us to knock $40-$60 off before we even agreed to rent it to them, they messaged me and asked if they could rent it and if we would rent it to them for 200 a week. I just used the banks as reason for not being able to drop the price, they didn’t end up renting.

    However I do rent to family, my parents currently rent one of our houses off us. They pay the mortgage and rates and do what ever they want to the property, however I have a very close relationship with my parents. We have also rented to my brother and his kids when he needed a place.

    • Lucas Hall

      Hi Kerryn,

      That’s great that you’ve been able to make it work with your parents. I’m getting ready to break my rule, and I’m going to rent a house to a group of girls that my wife mentors. I sat them all down and made sure they understood my expectations and that I won’t treat them any different. Let’s hope I’m not making a mistake.

  • Rosie Clench

    I rented my house to my Husbands best friends at a discount 3 years ago, as we wanted to test the water living abroad. We thought this would be an ideal solution should we want to return and not have to cut all ties. We recently decided to sell the house as we want to buy a house abroad. We have informed them of the entire process and gave nearly 4 months notice. We have since had nothing but abusive messages and threats. They have lied to other friends about the situation and cause friction between me and my husband. Would I ever rent out a property again? NEVER!!!

    • Lucas Hall

      Hi Rosie,

      I’m so sorry that happened to you. In my experience, what you are describing is typical when you rent to a friend or family member. They expect special treatment, so when you treat them fairly, they get angry.

      I’ve never had this kind of situation when renting to folks I don’t previous have a relationship with. I set the ground rules early on and use a rock-solid lease. If they don’t pay, I start the eviction process immediately without worrying about ruining the friendship.

  • PedroNYC

    It’s never a good idea to become a tenant to a private homeowner. One thing to worry about is what if the landlord wants to sell the house, where will that leave you? Evicted, that’s where. If anyone wants to rent they’re better off going to an apartment complex that’s under management. As of not landlording (hehe) to friends/family, I agree with you 100%.

    • Lucas Hall

      Hi Pedro,

      Thanks for the comment.

      What’s with your fear of private landlords? I’ve found that it’s the apartment complexes that usually tack on extra unnecessary fees and cost more. In fact, the majority of rental properties in this country are owned by private independent landlords. Also, just an an FYI, the sale of a property does not generally terminate a lease. If a tenant has a fixed-term lease, a change in ownership doesn’t usually void the contract.

  • Vikki

    I am in the middle of what I thought would be an ideal roommate rental situation. One friend renting both bedrooms and a private bath. I warned him, I must go through the same process as any other possible tenant. Trust and verify.
    He is not liking the “verify” part, is self employed yet refuses to give a bank statements, contract agreements, or anything to verify what comes in average, monthly. He keeps telling me, you’ve known me for 10 years, this is too intrusive, I work on trust and a hand shake. His credit report shows no fico score is available, a large judgement from 6 years ago from a credit union he says he never belonged to, plus several collections, most which he states are due to identity theft. How can one even know?

    • Lucas Hall

      Hi Vikki

      I can’t stress enough how important it is to follow the same screening process that you would with anyone else. If he’s not willing to submit a complete application and subsequent docs, then you can’t qualify him – it’s as simple as that. After all, you are giving him one of your largest assets – a house. Please, stand up for yourself. If he’s giving you problems now, just imagine how it will be when rent is due?!?!

  • Rebecca Neely

    I have a rental property, my ONLY INCOME. I know not too rent too friend or family, my question is this. The tenants that I have right now gave their 30 day notice that they’re moving out they gave me this on January 28th they are vacating the property February 28th. Back around January 15th they had a massive water leak under the house and about 5:30 that morning the husband talk to my boyfriend who lives with me about work and have a nice day basically typical conversation. Not one time did he mention the water leak, he waited 14 hours before he decided he was ready to tell us about it then he tells me he’s moving out in 30 days had brand new carpet in there now he’s leaving the red clay mud all over the rug. It’s kind of like his way of

    • Lucas Hall

      Hi Rebecca,

      Sorry to hear about the ruined rug. What exactly is your question?
      If you think the tenant was negligent in telling your about a leak that he was aware of, and as such you suffered additional damages, then you probably could hold him responsible for those additional damages. But before you do, please talk to a lawyer and get a legal opinion (which I am not). Good luck to you.

  • Jessica

    I wish I’d found your site last year. In late 2015, I bought a property (new home owner) to live in for a year, then turn into an investment. I’ve allowed two friends to live with me, with the spoken agreement that they’d contribute in the form of renovation help and/or rent. Separate situation for each.

    Long story short: Renovation is near done. That friend is dirt broke. I’ve paid all expenses, food, etc., for both of us for 7 months. When I suggest she now start contributing to food costs (never mind rent), I’m met with, “I have no money.” The other “friend” is never here but leaves all her things in my house. She owes me $1,200 in rent that she promises, but never pays.

    It’s a nightmare. I’ll never make this mistake again.

  • Tonya

    12 years ago my sister and her husband moved in my home to pay it off and keep. They have missed a payment that we paid a couple years ago but it was just in time because they were late for 12 months. Now they are separated, the house is destroyed- no flooring, broken doors, 50 + holes in the wall. Broken toilets, cabinets missing, smells like smoke . We started doing repairs and my brother in law is moving out. Partially because he keeps threatening and partially because we gave him 60 days to leave. Now he’s not paying rent and won’t help do or pay for repairs. He threatens to take the ac he replaced, and other items he put in there, like the stove etc? We did paperwork years ago but has been lost in moves. Is there any hope?

  • Scott

    We have just leased our first apartments to a family with small children that live on the 2nd floor. I have received two calls this week from tenant living on 1st floor complaining about the running noise from above. I have spoken to the tenants and asked them to be considerate of the tenants below and to stop the running. What other steps can I take if tenants keep making noise? I am terrified that we will loose our tenant from the 1st floor due to the noise issues.

  • darryl day

    When you rent to strangers..Most put their rent money aside first..then spent or do whatever with the rest..Friends/relatives do the opposite..They spend their other money first and then if theirs enough for rent you get that..Not saying of course everyone does it..But it has happened to me three times..They def. try to take advantage

  • Lady

    I am dealing with the same issue. We are renting the rooms to coworkers and now we have are having a hard time on how to tell them they need to leave without hurting their feelings and ruining the friendship.

  • Marie

    I can’t recommend renting to family and friends. As a matter of fact, I would go so far as to say avoid business transactions with family and friends at all costs. My sister has rented our home for the last five years. I will acknowledge shortcomings on both our parts that have not been good for the situation. We have decided to sell and she is quite upset that we are asking her to vacate the property. I am just upset that this is hurting our relationship and truly wish we had never gone down this road in the first place.

  • Liz

    I know in my gut it would be a major mistake to rent from a friend of mine. Friend/potential landlord warned me I could not hang curtains, or put up pictures. Water had to be used wisely. utilities in her name, etc. She had a very rude husband, and she was a controller. After ignoring my gut feeling, I thought I would make it work. I woke up one morning and know that there is no way that it would work, and how important it is to listen to your gut.

  • B.

    When a friend of mine was going through divorce, he asked to live with me. I agreed thinking it was temporary and charged him very little rent (he was under employed.) this was a full year and move ago- we now live in a different house (I paid for him to move too and gave him a free months rent for making him relocate.) I’m at a point now where I’m wondering if I should charge market value for the space – it’s much larger and has its own bathroom. He’s currently paying half of fair market and has no plans to leave, but I don’t know how to broach the conversation at all. I worry that I’m being entitled because I don’t NEED the space and it’s making money (even if it’s not much. I likely wouldn’t rent the space at all if he wasn’t there. Argh

  • Stephanie

    I have a friend who asked me the day before they were being evicted from their place to stay at my cabin for 2 weeks until they find a place. Heres my concern…
    They are a family of 6-
    4 kids ages 3, 8, 10, 15 and 2 adults. Kids can be destructive. We dont have little kids. We have worked every weekend to make our cabin nice. Finally, it is finished.
    Next concern is how can they say 2 weeks when they acknowledge there is no rentals in the area, they want to stay in. I feel guilty that we have a house that isnt being used all week and they are homeless. We have been friends for 20 years, but this isnt the first time she has been evicted. I cant financially help. I would need some money to cover bills that would go up. Help!

    • KangarooJumper

      Don’t do it.

      Evicted twice
      Only 2 weeks 🙄

      Gut instincts are normally right

      If you do, do it make sure paper work is all done up to date don’t let anything slide, charge them rent and don’t let them have a free ride

      I’m all for renting to people you know but don’t be a fool about it

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