So your friend (or relative) has asked to rent your investment property…
How do you decide if renting to friends is for you?
This scenario should be considered carefully.
Some landlords do rent to friends or family, but we recommend you only do this if you have clear boundaries in place.
We recommend not managing your own property when you know the tenant. To protect yourself, engage a property manager.
In this blog, we’ll help you to decide whether renting to someone you know is right for you.
Some key questions to ask yourself are:
- Can you establish clear boundaries?
- Are they likely to keep to your standards?
- Is it clear who will take care of what?
- Who is best suited to manage the property?
Read on to find out more…
Can you have clear boundaries when renting to friends and family?
Boundaries are important in any kind of business relationship. Can you and your friend or relative agree on what these are?
Examples of issues to consider include:
- how often you can enter the property and how much notice you must give — the Residential Tenancies Act (RTA) sets the limits
- how the tenant will contact you about issues with the property
- what issues you will be responsible for
- how property damage will be handled.
Understanding the RTA is important — it regulates a myriad of issues, including inspections, notice to enter a property, and what types of repair must be acted on urgently (within 24 or 48 hours).
When dealing with friends or family, don’t forget, you must still comply with the RTA.
If you decide to rent to friends or family, it’s even more critical to hire an experienced property manager who can communicate with everyone effectively.
Can the tenant meet your standards?
All landlords have different ideas about what it means to maintain a property to a reasonable standard.
Whether you have a prized garden needing careful tending, or you simply want the property back in the same state it was before you rented it out, it’s essential to communicate clearly with tenants so they know what you expect.
Renting to friends or family can be stressful. You may feel pushy communicating standards, and friends or relatives can feel slighted or criticised.
To avoid this scenario, hire a property manager — they can help you handle any issues around maintaining standards at the property.
Who does what?
When family and friends become your tenants, they may expect more of you than other tenants would, whether it’s calling you up “as a friend” for help with maintenance, or not paying for the damage they cause.
The RTA is not always clear on exactly what costs landlords and tenants are responsible for.
This is where a property manager can be invaluable. They understand the standard WA residential tenancies lease and the RTA.
A property manager is also invaluable when communicating with tenants. They can communicate at arm’s length, knowledgeably and objectively.
If you’re sold on renting to friends and family, who will manage your property?
Whoever you rent to, using a property manager will give you access to legal knowledge, experience and property management systems. Property managers are used to managing day-to-day management issues and resolving conflicts.
At We Love Rentals, our property managers are rental specialists. They manage no more than 80 properties per property manager, to ensure your property receives the attention it deserves.
Making the call
Deciding whether renting to friends and family is a good idea can be tough. On one hand, you may be able to help them out of a difficult spot. On the other, they may create issues — for example, late rental payment or damage to the property — which can strain relationships.
Only you can know what’s right for you, but using an experienced property manager means someone well-informed and objective is looking after your interests. This can save you time, stress, money… and possibly relationships!
If you think our team of dedicated, knowledgeable property managers can help you, give us a call on 08 6254 6300. Sarah, Brendan or Janine in our management team would love to assist you.