The Temptation of Being Friends with your Tenants

Written on January 27, 2015 by , updated on May 13, 2016

Friends with TenantsI don’t get strong, intuitive signals often, so when I do, I listen.

When a good friend of mine asked whether she could move into my rental property, I instinctively knew before I even had to ponder the thought that the answer had to be “no.” We had an awkward moment, sure. But that one uncomfortable afternoon was far better than losing a dear friend.

Michael Corleone’s line from “The Godfather: Part III” sums it up well: “Friends and money — oil and water.”

The Most Common Problem

Resentment

Renting to Friends

Renting to your friends is not a good idea.

The problem with renting to a friend is that resentment is bound to set in — from both sides.

Your friend might resent you making any sort of profit from him or her, and you might feel funny about that too. But if you don’t charge the going rate, you’ll probably feel cheated every month when the lower amount comes in.

Even worse, friends might feel as if they can pay their other bills first, possibly being late with rent because you, as a friend, will “understand.”

Friends tend to take advantage of the situation, not taking the landlord-tenant relationship as seriously as you do.

In my opinion, it’s best not to rent to friends if you care about keeping the friendship.

Related: Tip #21 – Don’t Rent to Friends

Renting to Existing Friends

If you’ve already rented to a friend or have let your landlord-tenant relationship morph into a friendship one, you can still salvage the situation.

Put Everything in Writing

Draw up a lease. You can use a state-specific lease that you customize. Check out our list of recommended legal forms sites, or you can search for templates from government websites on USA.gov.

Put your exact rules and expectations on the lease. For example, if rent is due on the first of the month, state that there will be a late fee of $X if the rent is paid after that. Many states also allow daily late fees, which help provide incentive for getting a late payment in sooner rather than later.

Related: Landlord-Tenant State Laws and Regulations

Document any rules that are important to you. Sit down with your friend to discuss the lease. Let him or her know that this is your business and that you need to enforce the lease, including a possible eviction if the lease is broken.

It’s better to discuss this upfront when friends are involved than to try to enforce your policy during an episode. That’s usually when friendships are lost.

Related: Always Get it in Writing

Use a Management Company

Should I Hire a Property ManagerOne way this might work is to turn the management duties over to a property management company.

Although property managers are not cheap, it’s a small price to pay to keep the friendship – if you don’t get bitter about the extra expense.

Explain to your friend that he or she will deal with a property manager, not you, regarding everything to do with the unit. That way, when your friend can’t operate a pet rescue out of your property or pay the rent in installments, you can blame the rules on the property management company.

Related: Should I Hire a Professional Property Manager?

Making New Friends with Tenants

Friends on Porch

Make new friends, but keep your distance.

But what about becoming friends with a tenant? Is that okay?

It’s common for landlords to find they have some common interests with their tenants. It might be tempting to hang out or socialize with such a tenant, but avoid the urge.

Your tenant might make the perfect tennis partner, but what happens when the lease is up and you want to raise the rent?

It could get you into a emotionally laden situation that you’d rather avoid.

You are a landlord first, a friend second.

This Is Your Business

Being a landlord is a business, so don’t feel pressure to be the “cool” friend by letting your friends rent your property, or being the cool landlord by also being a friend. It usually works best if you treat your tenants in a professional and businesslike manner.

That means treating your tenants with respect.

I’ve heard some landlords say they treat their tenants as children who need to be managed. That’s the wrong mindset to have.

This isn’t a parent-child relationship. Unless you want your tenant to eventually rebel (children turn into teenagers), treat your tenant as a client you want to keep. After all, you need tenants to stay in business.

Related: How to Grow Amazing Tenants

The Ideal Situation

The best situations are ones where landlords and tenants respect each other and have good rapport.

If something needs fixing, you should handle it right away. If your tenant starts to pay the rent late, address that issue immediately.

Once you strike the right balance between being personable while still enforcing the rules, you’ll be good to go.

photo credit: Ed Yourdon via cc
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17 CommentsLeave a Comment

  • Terry Oldham

    Excellent article & so true!

  • Laura Agadoni

    Thanks Terry,
    Believe me, I’ve been there done that! Even exchanging recipes can get out of hand.

  • Lars Thurfjell

    My last tenants were awesome, and it was very tempting to “hang out” with them.
    They even invited me to parties (at my place) and I conveniently was “unable” to attend them.

    Eventually they moved out of town and I feel much more comfortable being friends with them now.
    I might even visit them in Seattle where they now live.

    • Laura Agadoni

      That was wise of you Lars. And now you have friends (in a cool place to visit) that you might have lost trying to mix the two roles.

    • Lucas Hall

      Hey Lars!

      I have tenants who live below me, and my wife has befriended them. I’m the only landlord listed on the lease. Though I try to keep the relationship professional, I can’t keep my wife from being friendly!

      She’s had them over for multiple game nights and movies. They are fine people, and I really hope it ends well.

  • DAN HUNTER

    95% of landlord/tenant problems never arose after I began giving each tenant a Christian Bible at closing of rental agreement. Of coarse I continued to require a strong co-signor if tenant was under the age of 30 or if there was even a hint of derog on a credit report. Also, I continued to correct any problems with the rental unit the day after tenant complained. After 41 years I sold out due to ever increasing laws in the Detroit area. I miss my tenants.

  • Laura Agadoni

    I’m glad you had good landlord experiences, Dan.

  • Tracey

    This is a great article and one every landlord should have as one of their commandments – thou shall not rent to a friend or become friends with a tenant. I make that clear at every lease signing. I tell them that I will always be friendly, but I won’t be hanging out with them and going to the park, exchanging recipes, etc. I document everything even if they say I can come talk to them instead. I tell them that is how I do business, sorry. Documentation has paid off for me every time as there are no grey areas. Keep it friendly and professional, but do not become friends. It’s funny how many of my tenants call me a friend when they are renting from me, but once they move, they move on and I usually never hear from them again.

  • Laura Agadoni

    Thank you Tracey!

    Sounds as if you have a great system that works. I admit that when I was just starting out, I learned the hard way: After a few recipe exchanges, I was agreeing to accepting the rent late, and that snowballed. Live and learn!

  • Effing Landlord

    I’ve had good and bad experiences with friends. Resentment can be an issue, especially if the landlord is helping out to some degree. For a wild wacky story on this topic, check out “The Mystery of the Bullet Hole in Jack’s Sofa” at http://www.effinglandlord.com

  • Gabe Sanders

    Oh this is just so true and such great advice. Very few people can manage a landlord tenant relationship with their friends (or relatives and children for that matter).

  • Niki

    Renting to family – especially to your children – is the biggest mistake ever. They assume you won’t kick them out if they don’t pay their rent, and they are right…how do you throw your grandchildren out on the street when you know their parents don’t have the money to rent somewhere else? But this also applies to any family member or friend. It’s almost a guaranteed loss of relationship

  • Patricia Jones

    I fully agree. My property manager became friends with me, and we did really fun things all last summer; music fests/dining out/movies, etc. I thought I had a true friend. Well something happened at a party I threw – at her suggestion (I still don’t know what it was) and suddenly it all stopped. She’s telling other women tenants I was getting close with to ignore me when I approach too, or to just avoid me. They (4 of them) will all go to dinner or some other function, and they make sure I see them leaving together….to ‘rub my nose in it’. We’re all in our 50’s, and they’re acting like pre-teens. Pretty sad, and I hate to admit it-but it does hurt.

    Very awesome article; thank you for writing this.

  • Kelly

    I have a new tenant about six months in, she is very pleasant, however, she is bending over backwards to befriend us. We have explained that we must be landlord/tenant and to notify me regarding issues with her apartment only and not to be in each other’s personal business. Kicking her out will not solve anything, and none of our prior tenants have behaved this way. Any advise is appreciated.

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