Renting To Relatives

They always say you never do business with family, but how about renting to a relative? Do you give mates rates or go market rate? 

I think you need to have clear communication and clear guidelines to make it work, but it can really work well. Here's how. 

Charge what the market will bear.

You don't want to give your relative special treatment for many reasons. She needs to appreciate what you are providing for her, and she needs to pay what other renters in the area are paying. If not, she takes advantage of your kindness, and surrounding neighbors, if they find out. will be quite jealous indeed! 

And in business, there's that feeling that eats at you when you've given too much quarter to get the win. Doing this with family hurts doubly, because you feel family should understand you don't want to lose money renting property to them. 

Discuss the terms beforehand and get full agreement on everything. This is more important with relatives than with strangers. Strangers expect that you want to charge market rate and are prepared to pay it, especially If they have done their research. If you don't do the same with relatives, you run the risk of real resentment down the road. Spell it out in plain english, in legal terms appropriate for your region, and then talk about it to make sure your relative understands fully the situation. 

Above all else, sign that lease! Use a legally binding lease, with everything spelled out on what is expected from them (and from you) and everything (hopefully) will be hunky dory.

What is your view on renting to relatives? have you had good experiences or bad?