Renting to friends or family should be hassle free?
Unfortunately it isn’t always quite so straight-forward.
Managing a property isn’t easy, things do go wrong with houses, and with tenancies.
It sounds great renting to friends or family, but do be careful and keep it professional so that if things do come up you have things in place to handle it. It’s hard to be dispassionate with people you’re close to, so set it up the way you intend to continue it – professionally.
Here’s our advice.
Do ALL the things you would do with any other tenant:
- Make a detailed property inspection. Then you’re both aware of how the property looked before they moved in so there is no room for disagreement.
- Continue with three monthly inspections with a report and photos – your insurer expects it.
- Complete a tenancy agreement and a full schedule of chattels etc.
- Define who pays what bills – water, gas, lawn mowing, garden pruning etc.
- Get a baseline meth test. If at any stage, even after they’ve gone, there’s a problem you must know where it came from. And you’re doing it to show them it’s safe and clean.
- Discuss communication boundaries. Be clear about when it’s good to discuss the property so things don’t come up at social gatherings. You’re entitled to time off!
Do NOT do these things:
- Lower the rent. It’s still an investment property! Certainly use the lower dollars of a range offered by reliable Property Managers, but don’t discount further. Doing so is giving your money away.
- Give them special treatment over usage or conditions. Again this is your investment property no matter who is living in there. You can’t allow them to sub-let, Airbnb, leave at 1 weeks’ notice etc.
- Leave extra chattels without a list and a clear understanding of who maintains them. If you leave something they are entitled to have it working at your cost!
- Expect them to treat it better than a commercial tenant would. Unfortunately it just doesn’t always work out that way and owners get left to foot the repair bill.
And here comes the plug: Don’t forget – you could always hire a good property manager who could look after everything and allow you to remain on good terms! We deal with all the awkward stuff so you don’t have to.