Why Renting Your Property to Family Could Be Problematic

Here are some questions you should ask yourself before you rent your property to family or friends.

Do they need to sign a tenancy agreement?

Yes, yes, and yes again! They might be family, but they’re also your tenants and both parties need to know what is expected of them. For example, they might say they want to stay for 12 months but then leave after just six. Without a tenancy agreement, there’s nothing to stop them – putting your income at risk.

Should I take a deposit?

This is a personal decision that you need to make, as there’s no legal requirement for a landlord to take a deposit. However, it is a good way to protect your property and any contents from damage.

Similarly, by having a professional inventory carried out before they move in, both parties know the exact condition of the property and how it should be left.

Should I do a tenant reference check?

Asking family for personal finance details? It might make you feel awkward just thinking about it, but it’s an essential step of the rental process.

While you may think you know your family/friends’ financial background, it’s still worth making extra checks. Referencing will ensure that your potential tenant can pay the rent and highlight any issues with previous landlords.

Are there any legal issues I should be aware of if I rent to family/friends?

Not exactly, but renting to family/friends could cause problems if you have a mortgage. In fact, a lot of lenders are quite strict about this issue, and you may need to ask their permission before you move family in.

This is because the lender could be concerned that you’d charge family members less rent, or be more lenient if they didn’t pay – both of which could impact loan repayments.

Renting to friends or family can often be a great option, but it’s one you need to consider carefully and go into with your eyes wide open.

For more advice on anything and everything related to rental property in AREA, call our lettings team today.

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