So, you have a spare room, and a friend or family member needs a place to stay. Naturally, you offer to rent it out to them.
Or maybe you’re the renter, and a friend or family member offers you a spare room. You figure it’s a win-win: They receive a cash flow boost, and you inherit a landlord/housemate who doubles as a friend.
After all, what could possibly go wrong?
Well, a fair bit, as it turns out. Here are five tips to avoid a rental nightmare.
“Don’t do it,” wrote one friend, when I asked about her experience renting from a family member. “WORST THING I EVER DID”.
While she acknowledges the renting was probably a trigger for something that was going to happen anyway, she remains upset by what happened, and concerned that others may make the same mistake she did.
“I think in hindsight it was the start of the end of the relationship,” she says. “The renting led to a breaking down of boundaries, and, then, ultimately to the breaking of the relationship. We barely speak now.”
So, how can you avoid this kind of relationship breakdown if you’re renting from, or to, friends and family?
Have you heard the old saying, “you don’t know someone until you live with them”?
Anything that irks you about someone isn’t going to vanish when you live together. In fact, it’s likely to get worse in close quarters.
So, give the situation and the personalities some thought. Ask yourself: Do we lead similar lifestyles? Which parts of my daily life would annoy my friend or family member? And vice versa? What’s at stake here? What would happen if it did go wrong? Could it ruin our relationship? And what would happen if it did?
No matter who you rent to, or from, and no matter what the reason, always sign a rental agreement. Yes, it may be awkward to negotiate at first, but the consequences could be far more damaging.
If you get it right from the start, living with friends and family can be a great experience, and one you might repeat.
For instance, Leona told us about a couple she knew who moved in together, not long after they had first got together.
It was the woman’s apartment and so she had her boyfriend sign a rental agreement, because she didn’t know anything about his living habits.
“They said it was awkward at first, but it saved any potential resentment or misunderstandings,” Leona says.
It ended up working out really well. So well in fact that, several years later, the same couple lived with the man’s mother for about eight months, and, before they did, signed another agreement outlining their living arrangements.
Getting everything right at the start is crucial to any rental relationship.
Barri rented from a friend-landlord, and says that outlining the ground rules was one of the main reasons they lived together happily.
“We were living together, so it was as much about living with friends as the landlord/tenant relationship,” he says.
Barri recommends sitting down and setting out the ground rules before doing it. Not just the financials, but any house rules – like when it’s ok to have people over, or how you split the housework.
“Try not to do this in the pub, and give each other time to think on it, after first talking,” Barri says. “Put it in writing and get a witness.”
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