By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA
Most renters start their search for a new apartment online, perusing rental websites and filtering down potential properties by price, location and amenities. Some renters ask business colleagues, friends, and family members if they have or know of anyone with an available property for rent. Both methods can lead to a successful outcome and a enjoyable tenancy but the latter has dire consequences if the arrangement goes bad.
Renting from a family member or friend may seem like a good idea at first, but all too often the tenancy ends with one party feeling like they were taken advantage of, or neglected. Rental real estate should be treated like any other business venture but when family and friends are involved the formalities such as lease agreements, security deposits, late fees, and maintenance are relaxed and both parties make the common mistakes of assuming their relationship will solve all disputes. In some cases the owner/landlord will typically relax qualification measures and make concessions based on the relationship, including not requiring an application, security deposit or even lease agreement. This may seem like the owner is doing the tenant a favor allowing for an easy rental arrangement, but in actuality both parties are now at risk without contractual agreements in place detailing the tenant?s and owner?s rights and obligations.
This clouded thought process doesn?t take into consideration the consequences that things can and will go wrong. All tenancies, regardless of how good or bad, have a beginning and end, rent increases and repairs, as well as good and bad times. Are you prepared to tell Uncle John that your rent will be late this month? How will your friend react when you advise them that the plumbing backed up and flooded the property? Will this cause discomfort and issues within your family or strain on a long-term friendship? These questions must be considered first and foremost and should strongly be factored into your decision to rent from a family member or friend.
Please understand these situations don?t always turn out negative. Renting from family and friends can be a comforting and secure experience that benefits both parties, but also remember the downside of a negative experience comes with different long term consequences that can drastically affect relationships and family ties.
Salvatore Friscia is a seasoned real estate investor and a residential property management specialist, focusing on single-family homes, condos, and small apartment complexes. He is the founder of San Diego Premier Property Management as well as The Friscia Group One, an investment group focused on distressed properties. He is a regular contributor to Buildium?s All Things Property Management blog.
Source: http://www.zillow.com/blog/2011-09-28/is-it-wise-to-rent-from-a-family-member-or-friend/
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