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I've thought about moving and my dad would be interested in renting my house if I were to move. I'm sure he'd take care of it better than a random stranger but what if there were financial issues and he were unable to pay the rent? I couldn't afford to pay rent/mortgage on two places.
If things didn't work out and I wanted to move back, that would likely cause issues. I wouldn't want to be roommates.
If I moved and didn't rent it to him then he would likely be upset.
I could possibly sell it to him but don't really want to sell as I might want to move back someday. Is it ever a good idea to rent to family?
We did it.
My ailing and neurotic mother needed a home, so we moved her and my sister, who volunteered, into the rental house. It didn't work out so we figured out a new solution. It wasn't really all that big a deal, once we thought it out. At the end it was necessary to tell little white lies to get the job done, and I had no problem with that.
We discounted the rent. And it was always paid.
I would not go the route of contracts and all that.
Absolutely not. Family and friends have a way of paying for a few months, then splitting payments, then no payments, then splitting the friendship/family (and you'll have to come up with "X" amount of back mortgage payments to keep the danged thing or you can lose that too!
I'm not saying that you will have problems, I'm just saying that if you do, it isn't just business at that point, it is personal.
If you can't afford to let your dad live there rent free, I wouldn't rent to him.
This is my same advice when it comes to lending money to family. If you can't afford to just hand them the money, with no expectation of being paid back, don't loan it in the first place.
This is very sad, but also very true.
I now refuse to loan money to family. If I feel like giving a gift, I will give a gift, but I will not loan. That said, I do loan money very often. I absolutely love a good high yield bond fund with low to moderate duration. I have absolutely no interest in loaning money out with no diversification, no interest, and strong concerns that it won't be paid back.
I've heard people say to just write off bad debts. I don't believe that. I would sacrifice relationships to get paid back. Some people feel that this means I am terrible at personal relationships. To the contrary, I don't feel it is worth maintaining a relationship that can only be sustained by allowing someone to steal from me. If that's the only way they want a relationship, I want them out of my life. It's better to just avoid that.
As an interesting side note to that. I have borrowed from my parents a few times in my adult life. I would borrow four, and sometimes even five figures at a time, with a contract stating when I would pay it back by, and I would return it before the due date and with the agreed upon interest. Unfortunately, I don't know many other people that I could trust to do that.
I've found it best to not conduct any business of any type with friends and family; not just real estate. Many times it will work out fine, but it's simply not worth the risk of ruining the friendship or driving a rift between family members for the times when things don't work out so well.
I've thought about moving and my dad would be interested in renting my house if I were to move. I'm sure he'd take care of it better than a random stranger but what if there were financial issues and he were unable to pay the rent? I couldn't afford to pay rent/mortgage on two places.
If things didn't work out and I wanted to move back, that would likely cause issues. I wouldn't want to be roommates.
If I moved and didn't rent it to him then he would likely be upset.
I could possibly sell it to him but don't really want to sell as I might want to move back someday. Is it ever a good idea to rent to family?
No. The fact that you have to second think it says you have valid reasons for concerns.
Just tell him you want to keep a good relationship with him so you're renting to strangers. OR rent it out and tell him after the fact. "Oh, sorry, I didn't think first". LOL
Renting to parents who clothed and fed you or maybe helped with college cost? To me something just may not sound right. Keep family and business life separate.
I've thought about moving and my dad would be interested in renting my house if I were to move. I'm sure he'd take care of it better than a random stranger but what if there were financial issues and he were unable to pay the rent? I couldn't afford to pay rent/mortgage on two places.
If things didn't work out and I wanted to move back, that would likely cause issues. I wouldn't want to be roommates.
If I moved and didn't rent it to him then he would likely be upset.
I could possibly sell it to him but don't really want to sell as I might want to move back someday. Is it ever a good idea to rent to family?
There was a rough patch when he lost his job in 2008... rent did get behind and we worked out a payment plan.
He's been caught up since 2010.
The real question is are you prepared for the fall out if the rental goes South?
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