Renting to family

What I’d say is you know your family better than anyone else does. But one thing I’d keep in mind is setting clear rules from the beginning. Financial issues or missed payments shouldn’t automatically become family matters — they should be handled professionally because business is business.

Also, be careful with the agreement and make sure everything is clearly documented. I’ve seen situations where things became complicated later on. I knew of a case where one brother ended up suing another and claimed that the rent payments he had made were actually intended to secure ownership rights to the home he was living in.. So be careful.

If your questioning it at all don't do it. I have personally done it with extended family and it just added an extra layer of complications. I would recommend if you want to help limit it for 1 year but doing longer term you may feel guilty when raising rents or having to perform repairs. Pressure to upgrade items that may not be something you would do if it was a normal renter.

My parents were my mortgage lender as their retirement funding and it worked extremely well for all for the last 15 years of their lives. So it all depends on relationship and the person’s sense of obligation / commitment to things. I’m a fan if it’s possible - but definitely discuss what you’d do if they could no longer pay, want to move out early, or if they want a repair or upgrade that you don’t want to do, etc etc.

That all depends on the sort of the relationship you have with the family members who are involved, i.e., your spouse if you own the property jointly and the relatives who would be renting.

I have family members who I know are very committed to handling things the right way in the sense of they always pay their bills on time and they are always honest. I have other family members who are dishonest, chronically behind on bills, sometimes just decide that "nope, I'm not even going to pay that bill/account", and would take advantage of a "rent from family" situation in a heartbeat (i.e., by just assuming that it would be OK to fall a few months "behind" on rent).

You need to be honest with yourself about the sort of person/people you would be renting to. You also need to think about how things could go badly, and how if things do end up going badly it will affect your relationships (i.e., with your spouse, with the relative-renters, and with other family members who might take sides in some future argument concerning the rental arrangement).