Is Renting to Friends a Good Idea?

If you are a landlord, there is a good chance that you will consider renting to friends at some point. You will come across either a friend or family member asking to rent from you or someone else might suggest it. How you choose to handle the issue could directly affect your relationship as well as your pocketbook. Here are a few things to consider before you rent to your friends.

Finances

When you rent to friends, it could negatively affect your finances. You got into being a landlord so that you could eventually make money. If you end up losing money, you will not have accomplished your goal. Sometimes, friends feel like they can be lax when it comes time to make their payment. You might be counting on that payment to help with the mortgage.

Relationship

Besides the finances, it can also hurt the relationship between you and your friend. They might take more liberties than you are comfortable with and you end up fighting because of it. For example, they might be late with the rent and know that you are not in dire financial need and tell you it doesn’t really matter.

The Verdict

Most of the time, it is not in your best interest to rent to friends. It can do damage to your finances and your relationship that may not be able to be repaired.

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