If you’ve ever considering living in a multifamily property or house and renting the other units or rooms to friends as a way of covering your mortgage, consider this a warning.
Nothing protects and saves friendships like having it in writing.
It’s easy when we like someone to not put them through the rigors we would any other prospective tenant. We know them. We like them. So we shrug off the protocol and assume their credit is fine, or they would never stiff us for rent.
For myself personally, and countless people I know, things went horribly different than that when we rented to friends.
In my case, I rented to a friend whose dog chewed all of the woodwork and stiffed me for five months of rent.
More recently, one of my clients had a friend she was renting to leave her a check for July that was a fraction of the cost they had verbally agreed to. Why? She wasn’t going to be home during that time, and therefore, didn’t think she needed to pay.
In my case, I hadn’t collected a pet or security deposit. After all, she was a friend, and needed a chance.
In the second instance, having a verbal understanding documented in writing would have prevented the rent shortage.
In both, following the normal pattern of pre-screening, requiring a rental deposit, and having everything documented would prevented the stress that was an inevitable result of not having them.
It can be tough to present a good friend with legal forms. But in the end, that’s what will preserve your friendship for years to come.