August 25, 2014 | No Comments Yet
We found an interesting article on Zillow’s blog today. It’s regarding renting from a friend. Have you ever had a landlord that was a friend? Do you think you’d ever be able to do this while keeping your relationship positive? Here’s what Jennifer Riner discovered (you can read the original post on Zillow’s Blog).
Experienced professionals often advise against entering business relationships with close friends. The risk of financial issues ruining long-term friendships is strong. At the same time, some landlords might feel more comfortable renting to friends and family members they can trust.
To help determine whether ease of mind is worth jeopardizing close bonds, we asked eight personal finance specialists to weigh in on leasing to and from friends.
1. Have you ever rented a home to a friend?
I’ve had dozens of renters cycle through my properties, but renting an apartment out to friends is a special case that definitely sticks out. The last time I rented to a friend was in 2007. For me, the experience went off without a hitch. I have had a property manager for as long as I’ve owned property, so a lot of the problems that might have come up didn’t have a chance to. I would definitely do it again. — Mario Bonifacio
I rented a home to a close relative once about a few years ago. It was a pleasant experience, and I’ll certainly do it again. The relative took good care of the house and told me of repairs needed, which I worked with him to get done, and then also gave me enough notice of when lease would be expired and need renewing, and when he was finally going to vacate. — Manshu Verma
2. What are some drawbacks of renting to or from a friend?
There are always risks when you turn a friend relationship into a business relationship. I can see problems arising when the tenant does not treat the property with respect, or doesn’t pay their rent on time (or at all) because it’s a friend. On the flipside, the landlord could develop some sort of superiority complex that could sour the relationship. After all, they’re renting from you, which puts you in a perceived position of power — at least in the traditional view of landlord-tenant relationships. There could also be tension if and when it comes time to raise the rent. — Nick Loper
Discovering your landlord friend doesn’t take what you consider to be the best possible care of the property can damage your perception of them. Small issues may arise that end up causing huge riffs in friendships. Weigh the importance of this person in your life versus the financial gain you’d take by entering a lease agreement. If the person is important enough to you, it may not be worth taking that risk. — Femme Frugality
3. What are some potential advantages?
Since the renter is a friend, one usually knows the person. It’s better than renting to a stranger. A friend will take better care of the property.— Hoimonti Basu
For me, it was saving some extra money. His rent helped to defer the mortgage every month. Another advantage is being able to do things without calling each other. We can be eating lunch on a Saturday afternoon together and easily make plans for that night. — Jon Dulin
4. Are there specific circumstances that would make you want to rent from or to a friend?
If the price was right, I’d be happy to rent from a friend. I’d want a clear contract regarding our obligations drawn up though — the same as with any landlord. Personally, I’d probably rather not rent to a friend. I’m sure they’d be responsible, but if not, that’s a lot of added emotional stress to the regular stress of being a landlord. — Mel
5. Any general advice about forming close relationships with landlords?
It’s good to be on friendly terms with your landlord, especially if you want repairs and other issues handles promptly! Also, from a different perspective, it’s important to be firm with your landlord, too. You have rights as a tenant, and don’t let them shirk responsibilities they have. Sometimes people will treat you how you let them treat you! — Ray Advani
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