Being a landlord or rental property owner comes with its challenges, including finding the right renters to fill vacancies. But what should you do if friends reach out as possible tenants? Renting to friends can be a difficult decision for any landlord. If you are hesitant to rent to people you know, you could be avoiding potential drawbacks that come when you mix business with your personal life. However, there may actually be some benefits to allowing friends to rent your property.

It is important to weigh any advantages with the risks when considering a friend as your new tenant. Here is what our Henderson and Las Vegas property management team says you need to be aware of about renting to people you know.

Are There Benefits to Renting to Friends?

Although renting to people you know, including friends and family, can feel risky, there could be some perks. The most important thing is to rent to somebody who has proven to be trustworthy, dependable, and respectful. If your friend has those qualities, some benefits of renting to them may include:

1. More Flexibility

Depending on how well you know your friend, having them as a tenant could mean you have a little more flexibility when scheduling inspections or repairs. They may feel more comfortable with you entering the rental home or apartment unit outside of business hours or on the weekend to conduct regular maintenance.

2. Better Care of Your Property

Friends or people you know personally may be more inclined to take better care of your property than strangers. Because there is a direct connection to you, they may treat your home with more respect than other tenants and could handle appliances and property amenities with more care.

3. Easy Communication

Tenants might feel more at ease talking to their landlord if there is already a familiarity and personal connection. As a landlord, it may also be easier for you to reach out, ask about the rental property, and share important information about their lease.

4. Respectful of Rules

Another benefit you might find when renting to a responsible friend is knowing they will respect the rules and guidelines of the rental property. They may be less likely to break the rules of the lease agreement to avoid conflicts or damaging the relationship they have with you.

5. Temporarily Fill a Vacancy

If you have a rental property vacancy that you do not want to leave empty until you find a more permanent tenant, renting to a friend can be a way to recover some of the money you would have lost. Even if it means temporarily renting your property to someone you know, it will help you fill in that income gap.

Remember, all of these benefits come with the huge caveat that the friends you rent to are responsible people. If you have any doubts about their reliability or trustworthiness, it is probably best to avoid renting to them altogether.

What Are the Disadvantages of Renting to Friends?

Renting to friends can put you in a difficult position if things do not go as planned. You could also be missing out on getting the most out of our rental property investment. Here are some drawbacks you may face if you decide to rent to people you know.

1. Lost Rental Income

One big possible disadvantage to renting to friends is that you will lose valuable rental income. It is more likely that you might offer someone you know a better rent rate or provide complimentary perks you would not give a tenant who is not connected to you. In the end, even a small discount can make a significant difference over the course of several months or years covering the lease periods.

2. Lease Term Violations

While some friends may be more respectful of lease terms and property rules, others may take advantage of your friendship. They might assume they can get away with things because of their connection to you. It could even lead to disruptions in the community, tenant conflicts, and angry renters who feel your friend is getting special treatment.

3. Late Rent

Another reason to steer clear of renting to friends is the possibility of late rent payments. Again, some people may feel above the rules because they know the landlord or owner, which can eventually lead to a disregard for rent payment deadlines. They could also try to extend deadlines and lean on their relationship with you to avoid late fees.

4. Unreasonable Expectations

If you try to treat your friend the same way you would any other tenant, it could cause some frustration or disappointment. Because they have a friendship with you, they may expect to be treated differently or feel they are entitled to exclusive perks, including reduced rent or relaxed rules. These expectations can complicate your relationship and force you to make difficult decisions regarding your friendship.

5. Damaged Relationships

All the drawbacks of renting to someone you know could have a negative and long-term effect on your friendship. Having to choose between your business and your relationship with that person is a stressful and complicated situation. If your friend thinks you treated them unfairly or you feel disrespected or let down by somebody you trusted, the relationship could eventually become irreparable.

While it might not be all bad to rent your property to a friend, there are definite disadvantages in many cases. It is essential to carefully consider the decision to rent to somebody you know and only do it if you do not have a more qualified candidate ready to apply.

Finding Quality Tenants with a Professional Property Manager

It is not always easy to find reliable tenants with a solid rental history and good references. However, working with a professional property management company can help you reach your ideal candidates and get more qualified applicants for your rental property. Using strategic advertising and performing thorough tenant screenings can help you get the most out of your investment.

The Las Vegas and Henderson property management team at Black & Cherry Real Estate provides all the services you need to maximize your rental income and streamline the rental process. To learn more about our services and property management rates, contact our property management team today!