To NOT rent a property to DH's childhood best friend

[teomama]

I will start by saying I honestly dislike the said BF. He is shallow, materialistic, and mainly talks about money and things. He's a next door neighbour of my DH and they've grown up together, their mums being good friends. Now we're in the fortunate position where we're able to rent out DH's bachelor pad. This is a place he owns, we do not own jointly, hence I realise my husband has the final say. The BF has asked if he could rent the flat from us, as he wants to live with his partner, and his studio is too small for two.
The bachelor pad is our first joint home together with my DH, I love the place and have taken great care in decorating and maintaining it well. I'd like the place to be rented to people I like and believe will treat it with care and love. I don't like the thought of someone I strongly dislike staying there. Should I make this clear to my DH?

YANBU - Yes, you should be involved in picking up the tenants
YABU - This is your DH's flat and he gets to say who rents it

Oh, hell no.

She'll be on a minimum of £28/30k the moment she stepped into a school from this September and, assuming/hoping she isn't a wide eyed 22 year old, she's going to be on significantly more than that. True, it isn't fair that she should have to pay for a middleaged cocklodger her boyfriend's share, but that is not your problem anymore than the fact she's going to have the absolute piss taken out of her by him 'Oh, I can't pay for food or bills because of My Flat is taking all my money' is.

I would make sure you get a formal agreement drawn up by your solicitor. He may try to take advantage of the friendship if there is no legal setting for his tenancy

If your DH is daft enough to do this, then he absolutely has to hand it all to a letting agent. At least then there's a third party doing the contract and any communications between parties.

But your DH needs to be prepared for his mate to 'not have enough money this month'...and the next month...

Of course it's your DH decision, but I find it weird that some commenters would take issue with you having an interest.

My DH doesn't decide whether I change job, but we still talk about it because ultimately we've built a life together and while we're both autonomous adults, we discuss things that might impact that life. It's a two way street.

Letting to a friend on 'mates rates' is risky. Mates rates for a one off job? Maybe. But a long term arrangement? Absolutely not. Hell, I don't even take money of friends for stuff I'd eBay - I can either afford to give it to them or it gets sold.

As you say yourself, you now have 2 children / your costs have gone up significantly. Therefore you need to get the going rate for the flat, maximise your income.
Letting at mates rates, leaves you with less money. Why should you subsidise his lifestyle?

Given that your costs have increased substantially why renting way below market rent be helpful to tou?

He thinks it’s a win/win as we have two children and our costs have increased significantly

That alone would kill it for me, since it implies he's doing you a favour by contributing at all

Surely it's going to boil down to money. Is the amount you're DH has asked for (or agreed on) sufficient?

It's not rocket science (or even worthy of days of handwringing) . If the market rate is £1k and he says £500 then tell him to fuck off.. if he agrees on £800 and DH is happy then fine.

You could rent the place out for market rate though and have more money for your twins.

This is win for him and lose for you whilst you subsidise his lifestyle.

He CAN afford a house. He's got one. It's just not the one he wants to live in.

Tough shit. Grow up.

Don't do it OP. Don't let him take money from your family

Yep. If this arrangement goes ahead and then goes pear-shaped (which it's almost guaranteed to) it will be just/almost as much of a nightmare for OP as for her DH. So yes, she has a say, especially when she's also got new twins. Who needs a mega fall out and possible legal and financial problems that could be intractable?

Exactly how small is the friends house that it's big enough for him to live in but not a second adult? Does she have kids or something?

Either way there's nothing stopping him from renting his own place out to up his income (maybe this is his plan. Cheap rent off you and pocket the difference). With her contribution I don't see why he couldn't afford it. Surely she pays towards some sort of accommodation at the moment?

This all sounds like a terrible idea if I'm honest. Husband really needs to refuse any ridiculous mates rates on the grounds that he has twins to raise.

Honestly do not rent to friends. It’s a bad idea. We rented to our friends and they’ve paid a very reduced rent for years because they were friends. We’ve now fallen out with them and it’s just a nightmare all round.

This. Use a tenant find service, read up on tenancy law and statutory duties by doing a course, and never ever rent to friends or friends of friends, or family. It's a business, treat it as a professional service and professional property you are providing.

Thanks for your input everyone.
We came to the agreement that if we are to rent this property (sale is also on the table), this should be done professionally and not to a friend as too many things can go wrong outside of a strictly commercial exchange.

Thanks for updating, OP, and FWIW I think you're doing exactly the right thing

Hopefully DH's friend will accept your decision without pressuring you - after all it could have become very awkward for him too

Excellent decision, OP. I'm glad your DH saw reason.

I am a Landlord. (LL)
Everything I read on the LL forums says NOT to rent to friends and family. It can get really difficult & lead to losing a good relationship. For example, if rent is not paid and it has to go to court

Sounds like a win in the OPs case tbh. Big fall out, friend out of lives with a bit of hassle in between.

Sensible decision. Glad to know you are not going to stumble into a potential nightmare. It's good because now your husband can keep his friendship with his best mate separate from your property interests.

He can just say to his friend it's not a good idea. Which is the truth. It's not a good idea from any point of view, whether friendship, financial or happy and harmonious life. Keep it straight and honest with the friend.

Good decision OP.
Long experience has taught me that if you do rent to a friend, you must draw up full contracts all done legally and set it up totally professionally.

Even with that in place, I have been stung a couple of times, by friends who thought I was unreasonable to let them know a year in advance that I would be coming to live in or selling the property that I had let to them as a below market rent for several years.
(I owned a flat in UK but worked abroad for 2 long stretches, and rented it while overseas)
The friendships never recovered and I was really annoyed that my niceness (lower rent, very accommodating with furniture) was in the end seen as me being nasty because the contract came to an end. This was when in both cases they KNEW that I was overseas for a certain amount of time, so the one year's notice was hardly a surprise.

You did the right thing here. You have to consider if you rent out a property will the rent be paid and will the place be looked after. A property will always have wear and need say to be painted and have maintenance done.
I would agree with other people here not to let to friends or family.
I have a friend who ended up renting out a house for a few years due to personal circumstances. After all the expenses, mortgage payments and tax they are not left a lot of money. They were lucky enough to have good tennents.
Their current tennents are planning to move out soon and my friend has decided to sell the house then. It's gone up in value and they don't want the hassle of a rental property any longer.

I feel relieved though increasingly angry as it turned out this brilliant guy offered to pay “under the table” so my husband wouldn’t pay tax on the rental income. We’ve always paid what we owe to the last penny, I find it unacceptable to encourage your friends to commit a tax fraud so you can get a bargain deal for a second bedroom 🤦‍♀️🤦‍♀️

Good decision -- the more you tell us about the friend the more it seems you are right to stay well out of it.
It would be a nightmare in waiting, never mind any potential problems with the tax man!

So friend thinks he's doing his mate a favour by getting him to take the risk of tax evasion so he can get a cheap rent? You get to commit a crime for the privilege of him being able to live a better quality of life and subsidise his lifestyle choices?

Some friend...