Important Question!
I have very important question, my friend and I interested in starting to invest in real estate. However, this is the background information.
I am a store manager at a Walgreens in my area and my friend works for me, and I've known him for years.
We have been talking about investing in some real estate for some time and finally since I'm the one with a little more capital and credit etc., I have decided to buy another house for my family and I to move into that way we can use our current house as a rental.
Here is the question, my friend wants to get into this real estate with me, however he wants to move into my current house and pay me the rent. I know that people suggest that we do not rent to friends/family but I was wanting some feedback. I don't see any problems in the near future with it and I am prepared in order to pay the mortage on both if it came to it.
If I decide to do this would it be better to do a special kind of lease? And would it be better to month to month lease or a year lease. Month to month just in case something does seem to go wrong?
I think he can help with some updates and repairs since the current house does need some work. Is there something in the lease that I should put in order to cover my butt in case he tries to say the house isn't livable? Of course it is fine, a few updates need to be done but that is all. Or does him simply signing the lease mean that he agrees with the house conditions?
All feedback will be great!
Thanks a lot :OP
If you want to stay friends I recommend:
1. You don't rent to him
or
2. If you do rent to him, have someone else manage the property for you. This takes the decision making out of your hands.
Now that said, here are the rest of the answers:
No special leases. He gets the same lease everyone else gets.
Take pictures before he moves in.
You do the repairs.
Just my two cents
I have had business associates who later became friends and have had friends with whom I later did business.For the most part I am only still friends w/ the former since those relationships have a foundation in the respect we built as business associates first when we werent expecting any special favors from each other.
Always put everything in writing.