Table of Contents
- Can I rent out property to my family?
- Questions to ask yourself before renting to family
- What steps should I take when renting property to my family members?
- What are the tax implications of renting to family?
- How do I set a fair price for rent?
- What happens if I rent to family without using a Lease Agreement?
- Can a family member rent-to-own?
- Can I rent to a family member with Section 8 housing vouchers?
- How do I evict a family member?
- Repairing a relationship with a family member after eviction
- Are you ready to rent to your family?
Can I rent out property to my family?
Questions to ask yourself before renting to family
- Do my family members keep their home the way I would like my property to be kept? (e.g., Are they smokers? Are they clean? Are they responsible for their pets?)
- Am I able to fulfill my responsibilities as a landlord?
- Am I financially stable enough to rent to my family members if they can’t, or don’t, pay their rent on time?
- Will I be able to evict my family if needed?
Pros | Cons |
✔ You already know who they are, making the vetting process simpler and faster. | ✘ Family members may feel more comfortable crossing boundaries that normal tenants would not cross. |
✔ You can help family members in need of a home. | ✘ Required maintenance may go unnoticed if family members feel like a burden requesting property upkeep. |
✔ It can help with your financial obligations for your home. | ✘ Mixing business and family can create tension if arguments take place. For example, asking for late payments, a rent increase, or ending the lease early can be difficult. |
✔ Family members may feel obligated to pay rent on time to avoid damaging family relations. | ✘ There may be an expectation of special treatment like leniency on rent payments or other contract terms. |
Only you can decide if renting to your family is the best decision. Once you agree to bring your family into your property, you can take proactive steps to make a positive experience for everyone.
What steps should I take when renting property to my family members?
1. Check that your space meets rental building requirements
2. Do a tenant screening
3. Put a contract in place
4. Get the right insurance
5. Know your legal rights and responsibilities
What are the tax implications of renting to family?
It is important to follow tax guidelines when renting property. Tax laws are subject to change from year to year. Consult an accountant to assist with tax matters.
How do I set a fair price for rent?
- Asking a realtor to assess your property.
- Looking at similar properties on listings like Craigslist or real estate ads.
- Using a fair market rent calculator.
What happens if I rent to family without using a Lease Agreement?
What type of property are you renting to family?
Can a family member rent-to-own?
- The purchase price of the property: Property values fluctuate. If it declines, the tenant-buyer may end up paying more than it’s worth. Conversely, if it increases, the relative selling may regret the purchase price.
- A non-refundable option fee: Consider charging a fee to reserve the option to purchase the home at a set price. You can also charge a deposit toward the purchase.
- Clear contract terms: It’s crucial to avoid ambiguity. Create a well-drafted document that specifies terms, such as if there will be an expiration date for when the option to purchase the property ends.
- Financing and mortgage issues: A tenant renting-to-buy may face issues securing a mortgage or finances in time for the sale to be completed. This can be due to a poor credit score or the lender has yet to approve the loan.
- Default and eviction: If the tenant-buyer fails to make payments or violates the lease, the landlord may need to evict them. This would generate financial hardship for the landlord-seller.
Can I rent to a family member with Section 8 housing vouchers?
How do I evict a family member?
- Lease violations (e.g., not paying rent, damaging the property, etc.)
- The landlord is selling the property
- The need for extensive renovations
- The tenant fails to leave after the lease expires
- The tenant performs illegal activities on the property
What to do before eviction
Seeking legal help for evicting a family member
There is a specific process of do’s and don’ts you will need to follow, as each jurisdiction has its own laws for evictions. However, the first step is to send an Eviction Notice.