Have you heard about the new version of Family Feud? You play it by renting your investment property to a relative or a very good friend considered family. No one wins. The consolation prize: no one talks to each other ever again.

A familial Landlord-Tenant relationship doesn’t have to end this way, but chances are it will, unless everything is handled in a purely professional manner. And the best way to do that? Hire a property management company.

The property manager can run the tenant screening on your brother-in-law as well as field his 2:30 a.m. request for a plumber or hang the 3-day-to-pay-or-quit notice on his door when the rent isn’t paid. All the while keeping your family dynamics functional.

Should you opt to DIY property management, Chase Bank advises that “although your new tenant may be a loved one, it’s key to bring a professional tone when discussing the rental agreement. If your friend is serious about renting your property, then they should understand that signing a lease agreement and following the rules is key — this includes having them apply for renters’ insurance to further protect both parties from any potential liabilities. They should expect to pay their rent on time and follow house rules, while you, the landlord, should hold yourself accountable to keep up your end of the bargain.”

The cost of a professional property management company pays for itself and maintains harmony in the family. Before renting to a family member or loved one, consider the pros and cons. The following will help you get started.

Pros of renting to family members:

  • Helping out loved ones,
  • Rental is not sitting empty, and
  • Familiarity with tenant background a credit check can’t provide.

Cons of renting to family members:

  • Lack of a professional Landlord-Tenant relationship,
  • Being taken advantage of by loved ones — paying rent late, thinking the rules don’t apply to them,
  • Lack of boundaries, and
  • Violated expectations, “Why do we get the cheapest fridge on the market. I bet the other tenants don’t” or “I thought Carol was going to speak to the neighbors about their loud music. Guess she’s still mad about Thanksgiving.”

Rental agreements have expiration dates. Families are forever. Before deciding on your next tenant, talk with a professional property management company. Place Tenants can help. Call 800-886-1193 or email [email protected].

Photo credit: Kazuma Seki