Renting out your property to someone close can seem like an easy win. You can dispense with marketing and viewings, and even skip the tiresome paperwork and background checks.

Well, take a moment’s pause. Renting to family or friends does indeed have its upsides, but it also brings its own unique challenges, so it’s wise to weigh up the pros and cons before diving in.

Whoever rents your property — friend, relative, total stranger — has the same rights, and every landlord has the same responsibilities. So it's vital not to put yourself at risk by being overly accommodating.

It’s a bit like having an angel on one shoulder and a devil on the other — every advantage has a potential pitfall. And with that in mind, let’s explore:

What could go right?
What could go wrong?
The risks of relaxing your rules
Where boundaries can blur
Saying yes with confidence

Renting to someone close can work out beautifully for everyone, but without the right foundations, even the best relationships can come to blows. So here’s all you need to ensure that never happens.

WHAT COULD GO RIGHT?

Let’s start with the good news. Renting to friends or family can offer a smoother experience with feelings of confidence and certainty on both sides. When handled with care and clarity, the upsides can include:

Longstanding trust in someone whose character you know. You’ve probably also seen where they live and have an advanced insight into how they take care of their home.
Social accountability beyond the tenancy agreement. Nobody wants to be known as the friend or relative who let you down, trashed your property, or failed to pay the rent.
A close personal relationship may allow you to make more significant improvements to your property during the tenancy than with a regular tenant, and keep your income stream flowing.

When everyone's expectations are aligned, renting to someone you know can feel like a safe, straightforward option — but that doesn’t mean you should skip the formalities.

WHAT COULD GO WRONG?

Family and friends are some of life’s joys, but even with the best intentions, personal relationships can complicate tenancies from the landlord’s and tenant’s side. Some examples we’ve encountered include:

Expecting leniency around paying the rent on time - sometimes relatives don’t prioritise it quite as much as regular tenants because they feel there’s no risk of being evicted or penalised.
The landlord being slow to fix things they don’t consider urgent — a surefire way to annoy even the closest friend or relative living there.
Awkwardness around damage, noise, and nuisance. Giving someone you know a telling off can feel uncomfortable, but it may become necessary.

The answer? Have a proper chat with the friend or relative who wants to rent your property and agree to treat the tenancy with complete respect and to avoid testing each other’s limits.

THE RISKS OF RELAXING YOUR RULES

It might be tempting - and even feel nice - to rent your property to a friend or relative and avoid the rigmarole and paperwork that goes with setting up a tenancy. However:

You probably don’t know everything about your friend or relative’s credit score, salary, financial commitments or money management, so avoid cutting corners with the referencing process.
Friends and family are as susceptible as anyone else to personal problems, health issues and relationship breakups, so don’t skip taking out rent protection insurance in case they can’t pay.
Waiving the deposit out of trust leaves you unnecessarily exposed to the full cost of any damage, while taking one on a casual basis and failing to protect it leaves you open to penalties.

As with any business, it’s best to remove as many avoidable risks as you can in case the worst does actually happen. It probably won’t, but if it did, it doesn’t need to be entirely at your expense.

WHERE BOUNDARIES CAN BLUR

Although the adage “never mix business with pleasure” doesn’t always apply to renting to family or friends, there are some potential pitfalls to think about when your tenant is someone you know:

Expectation of “mates rates” when it comes to the rent, whether right from the start or continually throughout the tenancy. Or you may feel guilty about raising it to current levels.
If there’s a disagreement between you and the friend or relative renting from you, your dispute can spill into your social or family life, leaving others around you wondering which side to take.
It’s harder to evict. Taking legal action against someone you care about is emotionally exhausting, and it’s all too easily avoided until it’s too late.

All of this can put a heavy strain on cherished personal relationships, so we strongly recommend acknowledging these with each other upfront to ensure that you’re both comfortable to proceed.

SAYING YES WITH CONFIDENCE

Renting to someone you know can be beneficial for everyone when everything is set up clearly and correctly from the start, so before you hand over the keys:

Set the initial rent and future reviews just as you would with a regular tenant — avoid basing the tenancy on the expectation of financial favours.
Create the tenancy like any other, with thorough referencing, a watertight rental agreement, a photo-backed inventory, and a protected security deposit.
Set up a WhatsApp group for your property to keep the communication about it in a dedicated place. That way, things won’t get overlooked in general chitchat or social arrangements.

Finally, don’t rule out using a managing agent. Finding a tenant is just the start, and having someone on your side to ensure continual legal compliance and manage challenging moments can be a major boon.

Thinking of renting to family or friends?

Renting to people you know isn’t automatically a bad idea, and with the proper setup and support, it can be rewarding and reassuring. So approach it like a business deal, even if it’s wrapped in personal ties.

If you’re a landlord in the Wilton & Salisbury area and like the idea of watertight contracts, rigorous referencing and bulletproof inventories, call us on 01722 580059 or email us at info@piccoloproperty.co.uk for a chat with our team.