Offering your rental property to friends (or friends of friends) might seem like an excellent way to generate rental income. However, property managers can tell you that renting to friends or family can lead to a bad experience. The best property management company Coachella Valley offers has some suggestions on why it might not be a good idea and if you do decide to rent to a friend. If you're wondering, "what does a property manager do," they're here to help real estate investors avoid costly mistakes! Let's look at some of the reasons to avoid renting to personal connections and how to find the best tenants for your rental properties.
The Risks of Renting to Friends and Family
While you might feel like you're doing a kind thing to allow a family member to move into your rental property, it's crucial to consider the risks first. For example, you might have heard that you should never lend money or give anything of value to someone in your inner circle because the relationship might sour. The same principle applies when renting property to friends and family members: if something goes wrong, it can lead to a relationship conflict.
A Palm Springs property management expert knows that the following risks could lead to rental income loss for real estate investors.
Friends and Family Want Special Treatment
Property managers say that expecting special treatment is one of the most common risks when renting to friends or family. This could mean that the tenant expects a discounted rental rate or that it's okay to pay late from time to time. In other cases, friends might think it's okay to bend the rules without consequences. Then, when enforcing the rules, your friend or family member becomes upset that you're holding them accountable while living in your property.
Without enforcing the rules consistently for all tenants (whether they are family or not), it's unfair to renters who don't receive special treatment because they aren't your friends. To be a great landlord, a property owner must avoid applying one set of rules for tenants vs. family members renting a property.
Family Members Often Take a Casual Approach to Renting
Many property owners won't run a tenant screening on friends or family members, so they may not know about things in their past that would make them bad tenants. For instance, if you don't know that your uncle was evicted from his last three rental homes, you may not realize that he never intends to make rent payments or follow the rules while living in your rental unit.
It can be risky to rent anyone (family or otherwise) without references and a thorough background check. Property management companies recommend asking the same questions you would ask other potential renters during a thorough screening process.
Friends Can "Forget" To Report Maintenance Issues
Suppose a friend or family member has a legitimate maintenance problem with the rental. They might not want to tell you about it because they don't want to make you feel bad or bother you, or they might try to fix it on their own. However, property owners need to know about maintenance issues to prevent them from becoming costly emergencies.
Property Owners Experience Strains on Good Relationships
It can be hard to enforce something in the lease agreement when renting to a friend or relative. The "landlord-tenant" relationship can often strain good relationships with friends and family. Some property owners find it hard to send warning notices about a lease violation or past due rent. If a situation escalates, going through the eviction process with a family member can be devastating for the relationship's future.
In most cases, a property manager will recommend avoiding allowing a friend or family member to become your next renter to preserve relationships.
Blurring the Lines Between Friends and Business Can Be Costly
As a rental property owner, you may be inclined to rent to friends or "friends of friends"—especially if you need to fill a vacancy quickly. While this can be a great way to help a friend out and start collecting a rental payment, a residential property management company warns that it's essential to be aware of potential consequences.
Blurring the lines between friends and business can be costly. However, if you choose to rent to a family member, put a solid lease agreement in place and make sure they understand that they must follow the rules like any other tenant.
Hire a Property Manager To Manage Tenants and Lease Agreements
To avoid any potential problems arising from renting to friends or relatives, you hire one of the best Coachella Valley rental management companies to manage renters and lease agreements. McLean Company is an experienced property management company that helps investors find and place excellent tenants to maximize returns! If you'd like to learn more about how comprehensive property management services can help when dealing with tenants (related or otherwise), reach out to talk with our team!
