‘Rent it Right’ Tips for Landlords

by Janet Portman, Inman NewsDivorceQ: A friend who has just gotten divorced has asked me if he can rent the single-family house I own.

I gave him the keys after we talked about the rent and a few other things.
My wife says I made a mistake in not insisting on a lease and a deposit — but doing so would have hurt his feelings, and made me feel weird (we are, after all, really good friends).
What do you think? –Paul M.A: Whenever you do business with a friend — which includes loaning money — you have to be prepared to sacrifice either the friendship or your financial interests if the business deal hits a bump in the road.

So the question is not whether you should have presented a lease and demanded a deposit, as you would if the renter had been a stranger. The question is how likely is it that this tenancy will go smoothly? Can you expect that this friend-tenant will pay the rent, take reasonable care of your property, and be considerate to the neighbors? If the answer is a resounding “yes,” you may never hit that bump. The presence or absence of a written lease agreement won’t matter much if your tenant friend can’t come up with the rent and prevails upon your friendship for endless reprieves.That said, writing down the key terms of the deal is always a good idea, simply because all of our memories fade over time. And asking for a deposit should not insult your friend or cause you embarrassment. You may need that money if your divorced friend has difficulty making ends meet on his own, particularly if he’s paying child support. To make things easier, you could ask that he pay you in installments.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at [email protected].
Copyright 2009 Janet Portman

See Janet Portman’s feature, Landlord Charges Extra for Lawn Care.
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