I have cousins who are looking to rent for a while, and I have an unoccupied rental house. Do you think renting to family is a bad idea?
Renting to family can work out just fine, as long as there are clearly understood rules and boundaries in place ahead of time. Both parties should understand there must be a landlord and tenant relationship with regards to all aspects of the rental agreement.
Tenants have the right to expect a landlord to make needed repairs promptly, pay the taxes and insurance on a property on time, and do all the other things a landlord should do as outlined in the rental agreement.
As a landlord, you have the right to expect the rent to be paid early or on time, and for the tenant to respect the property and guidelines in the rental agreement. A landlord also has the right to evict a tenant through fair, legal process if they violate the terms of the agreement.
When it comes to these business dealings, you’re wearing the landlord cap, and they’re wearing the renter’s cap. At Christmas and other family events, the caps come off and you’re family. But you don’t get to play the cousin card as a way to keep from paying rent, and you don’t get to play that game to avoid your duties as a landlord.
Phrases like, “Well, I just thought because you’re my cousin” have no place in these situations.
Make plans to have a full-blown, in-depth conversation about every aspect of the rental agreement and relationship before anything is signed. If you don’t, there’s a possibility someone will develop a sense of entitlement about something.
And that’s no good in any type of relationship!
• Dave Ramsey is CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey