Few young people can brag that they're homeowners. In the U.S., home ownership among those under 35 has dropped from 45% in 1990 to 37% in 2015. However, in 2021, it increased to 41.6%. Still, many have to rent out their rooms to cover the bills.
This young woman did just that, and took in her sisters and their friends. Apparently, the fact that she's the owner of the house was unknown to them. So, when they found out that the person who's been collecting rent from them is a family member and a friend, they demanded she lower their rent.
A woman rented out rooms in her house to her sisters and friends, but failed to tell them that she's the landlord
Image credits: valeriygoncharukphoto (not the actual photo)
When they found out, they demanded she lower their rent since they're not just some random people she doesn't know
Image credits: Prostock-studio (not the actual photo)
Image credits: seleznev_photos (not the actual photo)
Even when renting to friends and family members, a written contract is a must
There's a popular saying that money and friends don't mix well. And this story illustrates that: some people expect that their friends will be more likely to let them crash at their place for free, lend them money more easily, and just have their backs financially when in need.
Being a first-time landlord can be tough. But what's even tougher is renting to friends and family members. Feelings might get hurt if they feel they're getting ripped off, and friendships might be in jeopardy over petty household arguments.
There are several things to consider when thinking about renting to friends. Perhaps the most important one is to understand that you'll be entering a business relationship. Money in friendships is one thing, but a tenant-landlord relationship involves money on a whole different level.
What's the worst that can happen when renting to a friend or family member? Thinking that a landlord who is also a friend will be more lenient, people are more likely to do these things:
- Pay rent late.
- Violate the terms of the rental agreement.
- Not report it when repairs are needed, like a leaky faucet.
- Get mad at you for confronting or disciplining them.
That's why it's so important to put any kind of tenancy agreement in writing, even with friends and family members.
Image credits:Ketut Subiyanto (not the actual photo)
Here are some tips on what to include in a lease agreement when renting to friends
Okay, you and your friend agreed to sign a lease agreement, but what do you have to include in it to make sure your friendship stays intact and neither of you gets ripped off in the process?
The experts at Nomadic Real Estate list these things as the most important ones to consider:
- Be sure to include rules about common areas, quiet hours, and having guests over. The experts at the online property management tool Avail also recommend including things like pet ownership, renovation, and maintenance policies.
- Don't forget to get a security deposit.
- Define what will happen if they're late with their payment.
- Perform a screening test. If it's a good friend whose financial situation you're familiar with, it might not be necessary. But if it's a friend of a friend, it's better to be safe than sorry.
- Consider charging a fair-market price. If you feel a discount is necessary, financial advisor Ray Martin says that a reasonable good-tenant discount is 10%.
The key to renting rooms to friends and family members is not to give them special treatment. However cold it may sound, the relationship between a landlord and a tenant should be business-like, even if they're your friend.
Image credits: MART PRODUCTION (not the actual photo)
There are some advantages to renting to friends and family, too
Choosing friends and family members as tenants is not all bad. If you're able to avoid the pitfalls of being a friend and a landlord, the experience might be quite rewarding.
- No surprises. You already know this person and can be sure that they will not damage your property and will pay rent on time.
- More flexibility. When doing maintenance or repairs, there's more flexibility than with a stranger. A family member or a friend is bound to be more forgiving if you're busy or late to coordinate with the repairman.
- Easier communication. This goes for things like increasing the rent or introducing new house rules. You know each other, so they probably won't assume you're doing these things out of spite, but out of necessity.
Image credits: cottonbro studio (not the actual photo)
"They apparently didn't read the contract before they signed," the woman wrote
"People who fail to read contracts are not your problem," people commented
