Katherine wonders if it's a bad idea to rent to family members. Dave says these situations can work out well, provided both parties understand the business relationship in advance.Show Transcript
QUESTION: Katherine asks Dave if he thinks renting to family is a bad idea. Dave says it can work out fine, if both parties have a complete understanding of the rules and boundaries ahead of time.
ANSWER: Renting to family can work out just fine if there are clearly understood rules and boundaries in place. Both parties should understand there must be a landlord and tenant relationship with regards to all aspects of the rental agreement.
Tenants have the right to expect a landlord to make needed repairs promptly, and pay the taxes and insurance on a property on time. As a landlord, you have the right to expect the rent to be paid early, or on time, and for the tenant to respect the property and guidelines in the rental agreement. A landlord also has the right to evict a tenant if they violate the terms of the agreement.
When it comes to these business dealings, you’re wearing the landlord cap, and they’re wearing the tenant cap. At Thanksgiving, Christmas, and other family events, the caps come off and you’re family. But you don’t get to play the cousin card to keep from paying rent, and you don’t get to play that game to avoid your duties as a landlord. Phrases like, “Well, I just thought because you’re my cousin” have no place in these situations.