Do you have property that you are considering renting to friends or family? You need to consider the risks of such renting versus hiring a property management company to represent you. Renting to friends or family can seem like a good plan at first. But there are risks of changing your relationship to them in the process of renting. If you are thinking of renting to friends or family, ask yourself the following question: Do the benefits of renting exceed the risks? Consider the following risks.
Friends or Family May Want to Take Advantage of the Relationship
If you rent to family or friends, you many have felt uncomfortable asking for credit and other background information in the process of executing a rental agreement. But getting credit and other personal information is just part of executing a rental agreement. The process needs to be completed whether or not you know the prospective renter.
Or your renters may pay their rent just a little bit on the slow side. Are you going to ask them to pay their rent on time if they are a friend or relative? A property management company will be expected to make this request with no problem. What if your friends or family do not respect the technicalities of the written lease because of your close relationship? Are you going to feel comfortable asking for their respect of the lease agreement?
Financial Problems can Change a Personal Relationship
You may feel funny asking friends or family for the rent, particularly if they just don’t have it. Think of the fees that can be involved in executing a business lease. Are you going to be comfortable asking for these fees? Or suppose you had to do an eviction of your grandmother from one of your properties. What an uncomfortable situation that would be!
Damages are Typically Deducted from the Security Deposit
Will you feel comfortable asking friends or family for a security deposit when it comes rental time? Liability issues can be hard on a close personal relationship if there is damage to the property during the time of the lease. Engaging a property management firm to manage your properties protects you from these difficult personal situations.
The New Position of Power can Damage a Friendship
When roles change, the shift in power can sometimes be too much for some personal relationships. All the way through the application process, through screening and finally creating the lease, applicants should each be treated fairly and consistently. In the rental process, you should treat your friends or family in the same way you would treat other applicants.
You can hire a professional management firm to help you with this aspect of managing rental properties. Property management companies have rules in place to make renting to your friends and family a routine process. They are used to asking the questions that need to be asked and are accustomed to dealing with tenants who tend to be slow in making rental payments. Using a property management firm is your key to enjoying the rental of properties to the public, including your friends and relatives.