Having someone familiar beside you is comforting and make you feel more secured. However, it is great idea to involve your family or friends in your business like property investing? The answer is it has bad and good points you need to take into consideration before making rash decision. One of the biggest hurdles is that drawing line between professional and business relationship. It is hard to maintain business relationship with someone you already know because you know them and familiar with them. However, it will be difficult to stick with familiarity based on personal acquaintance because then your business can go wrong. Your bias may backfire you.
Good and bad sides of renting to family or friends
Renting out your property to tenants is how you make the business works. You cannot just let your property vacant in long period because you won’t get any income from that. However, there is also low season when tenants are hard to find. Just then, a family and friend are in need of home rental. Should you rent your property to them or is it bad decision?
- Renting to friend or family means you already know and understand them of who they are, where they work, and their habit. Thus, it benefits you from deeper research about unknown tenants. It saves your time. It is even better when your family or friend also understand you, can pay rent on time every month, and take care of your property well just like their own home because they know how hard you work on it. However, the things can go wrong if your friend or family has bad habits such as late in payment or never clean the house. Thus, you still need to select which family or friend you can trust to rent to or else you will ruin your relationship, business, or both.
- Next thing to consider is tenancy agreement under legal contract. Business is business. You need to do it legally or else you will face bigger and unresolved problem in the future. In case of renting to friend or family, it is easy to confirm and agree anything through handshake or casual talking. When problem arises in the future, your effort to talk out can result in ruined relationship or failed business. Thus, it is safer to stick to tenancy agreement before sealing the deal to rent to your family or friend, no matter how close you are to each other.
- Things about renting to a family or friend is, it can give win-win solution to both parties. For example, when your property is vacant and your friend or family need a place to stay in then you can just rent it to them. They can take care of your property well. However, it is often that emotional connections affect the dynamic of your personal and professional relationship which can end badly. Thus, make sure to set out rules of engagement under legal premise for the sake of both parties.