It is said that being social and having many friends and family is good when you are doing a business. You can get a lot of business form your dear ones and their referrals. But this is not the case with the profession of a landlord. You only have units in your rental property that you can give on rent. By allowing your family members and friends into your property, you will be making a big mistake as they expect special treatment and monetary favors from you.
As a landlord, your objective is to earn a positive cash flow from your property. You have set a monthly rent that you think will cover all operational expenses and the EMIs to the lender. But your calculations go awry when half of the units are occupied by your relatives and friends. These people will not only insist on paying a lower monthly rent but also create many other problems for your rental income business.
Allowing friends to lease your property can prove disastrous
Can you say no to a friend when one unit in your rental property is vacant and he requests you to allow him to live in the home for a month or two? It is easier for friends and relatives to blackmail you emotionally and you also must ignore their violations of the terms of lease agreement (which most friends do not bother to even fill up). You cannot say a thing to your friends for these violations whereas you punish other tenants for same violations. This gives encouragement to other tenants living in your property and they too start to indulge in behavior that is not allowed and acceptable inside your premises.
Positive cash flow becomes difficult to achieve
If your friend does not pay rent on time, you find it difficult to remind him about this fact. You wait for a long time and then make a request for payment as if your friend will oblige you by paying the rent. If there are several family members and friends living in your property and some of them delay monthly rent, you will find it difficult to pay your EMI. You will also find yourself cash strapped, unable to carry out repairs and maintenance of your property. This will gradually deteriorate the condition of the property and will make it unattractive and undesirable for potential tenants. You will find it difficult to attract good quality tenants and your property will become distressed.
Initial bonhomie fades away quickly
Some landlords are tempted to rent out their property to their friends and family members as they feel that they will not require any screening. They also believe that as the tenants are finds, they will behave nicely and not create any trouble in future. But all these beliefs prove wrong later when these landlords find that the perceived advantage of acquaintance turns into a drawback.
You will not be able to take any legal action such as eviction if your tenants are your friends or relatives. If one of your friends loses job, you will not have the courage to ask him to leave your property. You will think about your relations and resist the temptation to take any strict action. Similarly, if a friend delays or skips monthly rent and asks you to accommodate, you will feel bad from inside but will not have the courage to say anything on his face.
Realizing all these problems, it is in your own interest to not allow any of your friends or relatives as tenant in your property.
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