Wednesday, November 25, 2020 / by AJ Shepard
Can’t beat the friends/family screening process – there is pre-existing knowledge!
- Even with the best screening practices, less than desirable tenants can end up in rental properties. These types of tenants can create headaches and financial loss in the form of increased wear and tear on the property.
- The feeling of helping a friend or family member, and the goodwill that is created, is hard to put a price on.
- One way less than desirable tenants are able to pass screening processes is to lie during the application process. With friends and family members, there is a relational track record can replace the application process, which creates more faith.
- By definition, investors are looking to increase the return of their investment. When friends and family members are the tenants creating the rental income, awkward tension can exist making it difficult to ask for the market rent when the market justifies an increase in the rent.
- When a relationship such as a friendship or family member is subjected to the hierarchy of a landlord-tenant dynamic, the result can be a loss of amiability.
- Moving friends and family members into investment properties are inviting them to a new level of trust as well as closeness. This opens pandora’s box to personal space boundaries being pushed and pulled. It is highly recommended that healthy boundaries are stated expressly as well as written into the contract. Remember, a contract is only in place to aid when things go wrong – investors will be happy to have a contract if situations do deteriorate.
- Friends and family members, generally speaking, want to see their loved ones do well. They do not wish to be the ones to bring up bad news. If necessary repairs and maintenance appear to them as bad news, they will not be prompt to mention the worsening conditions to the investor. Once again, it is important to talk about circumstances such as this and create boundaries before the friend or family members begin the lease or moves in.