Renting your house to a niece or a brother-in-law or your cousin and his family might seem like a good idea. You probably expect your family members to take good care of your property, pay their rent on time and be forever appreciative of the opportunity to live in your house. But what if they don't? What if they stop paying rent, trash your house and tell everyone you're a slumlord? When you rent property to a family member, have a qualified, impartial property manager oversee the landlord/tenant relationship.
Unless you are able to put your familial relationship and your emotional attachment to your relatives aside, there are several risks to renting your house to people you are related to. It may be uncomfortable to chase after them for late rent or inform them their last check bounced. If they violate the terms of your lease, and allow a pit bull or a few of their friends to move in, you may have to evict them. People who let their family members move in without a security deposit might be stuck paying for damage done during the tenancy. What might be worse than the damage to your bank account and your property is the damage that can be done to your family relationships.
A professional property manager will take the day-to-day landlord operations out of your hands. She will treat your family member the same way she would treat any tenant, which takes a lot of the pressure off you and also protects you from the liability you could incur with cousin Ed or Aunt Betty living in your house. A property manager will collect rent, handle any maintenance or repair issues that are needed and conduct inspections every now and then to make sure everything at your property looks good. Having the property manager as the primary contact for your relatives will enable you to maintain your regular family relationship. You won't have to talk business at family picnics.
Finding a Property Manager
Look for a licensed property manager who has experience with houses like the one you are renting to your family member. You can get referrals from other property owners and landlords, or through organizations such as the National Association of Residential Property Managers (NARPM). Talk to the property manager about your situation and let them use their expertise to effectively manage your home. Most property managers will charge you a flat monthly fee or ask for a percentage of the rent collected on your house.
Follow the Law
A property manager will bring legitimacy to the rental contract. It may seem silly to draw up a lease and ask for a security deposit from your family. Or, you might think you have all the time in the world to fix an air conditioning unit that isn't working since your tenant is someone you grew up with. However, treating your relatives like you would treat any tenant moving into your home will keep the boundaries clear and establish the expectations you have for the property. It will also keep you out of trouble with your state and local laws regarding landlord and tenant contracts.
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