Renting to friends

[Jazzz]

to answer the specific question in the OP:

yes, make clear (ASAP) that you will require a deposit and the month's rent in advance before you hand over the keys. I don't think letting agents will have deposits less than a month's rent, and neither should you (I paid six weeks). Don't do anything to give the impression you can be fucked about with, friends or not. Get on their case if they are late with rent. Keep it very businesslike.

 

[scifisam]

Yes, I understand this. But, at the end of the day, who owns the property?

D'you think if the op sells the flat for a huge profit one day (to move somewhere else, say.....and I am aware that the value of investments may go up or down), he/she will repay their mates for their contributions towards the profit they have enabled them to make?

Edited to add: and if the op does rent his flat out it will no longer be his home, it will be his tennants home.

In the OP, the question was posed 'do you think I should rent my flat to my mates (ie, become a landlord)'?

Is it such a surprise that there is someone who thinks the answer to that question is no, its not a good idea?

There are a few occupations that I could never bring myself to do, and in that list somewhere (probably not right at the top) are being someones' employer and being a landlord.


(as an aside, the OP should let their mortgage company know that this is what they intend to do, as they will probably need to change to a buy-to-let mortgage, as they now intend to run a business.)

Being pragmatic, though, he can't afford to pay the mortgage right now, and this is not a good time to sell, so there's not a lot else he can do. Otherwise he probably wouldn't take the step of moving into his parents' house. You're right, he is giving up his home - that's something that's deserving of sympathy, not contempt.

You have a point that he might need to contact his mortgage company to check that he's allowed to temporarily let out his home, but that doesn't mean he'd need to switch to a buy-to-let mortgage. He's not running a business.

I was once briefly a 'landlord' because I rented a room to a friend who needed somewhere to live quickly. When I was eighteen, I rented a room from an acquaintance, and she was technically my landlady. She let me move in without a deposit and took me on housing benefit, despite the fact that she was unemployed herself and did it all legit, meaning that she got hardly any money from it. I'd been homeless for a fair while before that.

Those are other situations where being a 'landlord' is better than not being a landlord.

 

[Wolveryeti]

It usually works that the kind of people that can afford a house as 'an investment' let it out to people who could never afford to buy, thus exploiting their relative poverty.

A pretty naive view of how the housing market works. There are plenty of people who couldn't afford to buy even if housing as an investment didn't exist. Assuming they are being exploited is both patronising and factually incorrect.

 

[Gavin Bl]

As others have said - definitely treat it as a formal business arrangement - and be clear with them that this is the basis on which it works - up front.

If they are going to be good tenants, they will understand and accept this.

 

[STFC]

For me I would never rent from a friend or even from anyone I knew. It would make me very uncomfortable as I like transactions such as these to be carried out with strangers. I feel less guilty then if I spill tea on the carpet etc or accidentally mark something.

I rented from a friend of sorts (a work colleague) for three years and it worked really well, but I definitely felt guilty about stains on the carpet, little dents where the door handle hit the wall etc. Only minor things, normal wear and tear, but with it being a friend's place I felt more responsible for the flat than I would a stranger's.

I'm now renting through a letting agency and in some ways I prefer it, as it's purely a business arrangement and it makes it easier to deal with things when they go wrong.

 

[STFC]

There are a few occupations that I could never bring myself to do, and in that list somewhere (probably not right at the top) are being someones' employer and being a landlord.

I can't afford to buy either, but I don't feel any bitterness towards those who can. Sounds to me like the OP has come to an arrangement that is mutually beneficial to him/herself and the friends who are struggling to meet their current obligations. If only life was as simple for everyone else as it appears to be for you. Meanwhile, in the real world...

 

[sky07]

I'm packing up and there's chaos everywhere, serves me right for hoarding so much tat for the past 3 yrs. It's sad to leave my flat but I'll be down the road at my folks place should the tenants need anything.
I left my job end of June not having another one to go to and had this idea that it would be easy to walk into another job. It hasn't so far and maybe it's because of the "credit crunch" or maybe it's cos it's the summer holidays.
Anyway I've told the mortgage company and the management company so I'm covered there.
What about household contents insurance since all my furniture is in the flat? I called my insurance co and they said that I wouldn't be covered for the whole amount now.
I guess there are good and bad employers and landlords, it depends on your attitude. I'm not weapons dealing!