3 Tips on Renting Space to Family or Friends
You have a studio apartment in a university town that would just be perfect for your niece -- she's starting college next semester. Her mother, your sister in law, has been talking to you about letting her stay there.
You do want to help but you are not sure how to handle this so it does not turn into a financial loss or a family feud. Here are some do's and don'ts for renting a room or apartment to family members.
3 Tips for Owners
- Spell it out: You should definitely sit down and think of all the conditions you have on renting your property to a family member. The only way to be clear with another is to be clear with yourself first. Make this list with the real you in mind, not the idealized version of yourself that you would like to be.
- Agree on payment: Although it may feel awkward to bring it up, don't wait until you are broke and resentful to discuss payment. Even if you are just letting a friend or family member stay in a room in your house, you should think about what it will cost you and how much money this saves them. You want to be a good friend but you do not have to be a martyr and long-term it will be better for the relationship if it's based on an exchange of agreements and not one person doing the other favors.
- Sign a lease: Consider signing a lease as you would with any other rental property. That way if things go awry, the terms of the deal are all laid out, just as they would be in any other context. If your friend or family member refuses to sign a lease or be bound to any agreement, you should be wary. You want to help but you do not want to jeopardize your home or investment property.
Homes and Castles
Whether you live in the home that you will be sharing with family or friends or you are considering renting out an investment property to them, it's important to get an impartial party to review any agreements and let you know where you might be taking a risk. Just as you wish to protect loved ones and friends, protect yourself. Do not take financial risks to assist another in need.
Talk to a Lawyer
If you are considering renting out a room or an apartment to a family or friend, talk to a lawyer. An attorney can advise you, provide impartial review of any agreement, alert you to any issues you missed, and help you with paperwork. Get guidance.
Related Resources:
- Find a Lawyer (FindLaw Directory)
- Ten Landlord Legal Mistakes to Avoid (FindLaw's Learn About the Law)
- Co-Signing a Lease? 5 Legal Considerations (FindLaw's Learn About the Law)
- Use Promissory Notes When Lending to Family and Friends (FindLaw's Learn About the Law)