Tips on letting property out to family!

cr1mson

A lot of BTL mortgages do not allow you to rent to family so even if you wanted may not be able. Plus I believe it can cause issues with insurance hopefully someone else will confirm.

If you feel bad for refusing just say you would love to but lender/insurer won't allow.

spingirl

Wow thanks for all your responses, bear with me!

Pixie5740 - I am well aware of the process as I mentioned earlier relatives of mine went through that very process to evict a family from their property who refused to pay & it is indeed unpleasant & costly - part of the risk though isn't it??

Ivana tinkle - my purpose in posting this was to see what other people's experiences were but it seems most are against letting to family yet most do not have experience?! I can understand the concern in the points raised but so far there has not been much of which I was unaware.

Bobq - personally I'd be more inclined to ask favours from a stranger than a family member as I'd be embarrassed to ask family for such favours as paying late etc but guess that's just me, can't vouch for other people.

We have seen a mortgage advisor but hadn't thought to check on letting to relatives so thank you for raising that. Will have to find out.

Bits & pieces - I agree it would not be nice to have to evict anyone, even strangers, wonder how common this problem is. Guess it depends on the area & the individuals involved. I'd like to know stats regarding how often land lords actually have to go through the eviction process.

I'm not sure what the interest rates have to do with family or non family members renting but I understand what you are getting at. Letting property is indeed business, whilst we will be newbies to this industry & have lots to learn, we are not actually completely ignorant of the way things work. Husbands dad has been renting properties for the majority of his life, still does & so we have heard all about the legalities, problems, niggles & so on. We have looked at what the going rate is for letting properties similar to ours in the area so know what the going rate is & we are fully aware that there will always be extra costs but again this is not just affecting people who let to family members, it affects everyone.

Phill99 - I totally agree, good point!

Tibawo - glad you are getting back on your feet, life can be tough to say the least! I'm pleased to hear of someone who has an actual positive experience of renting from a family member. Thought there must be someone out there! I guess no two people can agree on everything but you make things work & seven years is a long time. I do think it is down to the individuals involved, their are plenty of family members that I would not even consider.

Anotheruser - sorry, I thought it was clear enough but things can easily be misread

Yorkie1 - do you mean to say that rent never rises then?!

I agree it would be less emotional to evict strangers rather than family members but then again I would not find it easy either way, it would be last case scenario.

There seems to be a lot of grey areas regarding letting out properties, I am no expert which is why I come on here to gain more knowledge & hear opinions & to get tips but you are making the assumption that I have no idea of the eviction process or the legalities when I have already stated that several family members have been in this industry for many years. My father in law still lets properties & he is now in his 70s. We have learned a great deal from him over the years, I've known him for 15 years & get to hear all about the pitfalls.

I have been told that most tenancy agreements would not stand up in court but having lived in rented accommodation for about 5 years I do know that people have things such as no smoking in the agreement. Again you can only hope tenants are decent whether family or not.

We do have a mortgage already, I do know the going rate for rent in our area. You raise the same point as Bobq & checking with the lender if it is ok to rent to family members is not something we had thought of so will do that for sure.

I was actually hoping for views from others who have actually rented to family members not just people's opinions although I have stated that I appreciate all the feedback, everything is taken on board.

Thank you for your concern, I do recognise that there is more to letting a property than just taking money & giving someone a key. I wouldn't dream of entering a property of my own accord, regardless of who is living there, although this had happened to me as a tenant! Also I am not a person who skimps & am aware of insurance, deposit protection & necessary requirements as I say I have several family members who have let or do still let properties.

Thanks again to all, a few things I'd not thought of...

spingirl

Strapped - that is the truth!

Cr1mson - yes thank you for that suggestion as I've said I was unaware that some lenders will not allow letting to family members. I will be checking

Yorkie1

What people have not said is that while none of us (I think) has personal experience, many of us have been on this forum for quite some years, and have seen many threads where people have let out to family and it's gone wrong.

We aren't posting in a complete vacuum.

spingirl

But I'm thinking people will only post about negative experience Yorkie1. Can't imagine anyone coming here just to post about how great their experience of letting to family members is going?

There is one positive response here by tibawo.

I have four family members from my side & husbands side of the family who have experience in letting & also a good friend of mine but none have let to family members but not to say they wouldn't. Maybe I should speak with all of them too...

spingirl

Also I'd imagine there are plenty of posts here about renting gone wrong which are not in relation to family members..

Yorkie1

It seems you'd made your mind up about this before posting, so I don't think I've anything useful further to contribute.

whitewing

If it made good commercial sense to rent to family, wouldn't more people do it?

Wouldn't there be 'family rental mortgages'?

Mojisola

whitewing wrote: »

If it made good commercial sense to rent to family, wouldn't more people do it?

Judging by the number of "can my relatives claim housing benefit if I take them on as tenants?" posts on MSE, there are quite a lot of people doing it.

Kynthia

Most people who let to family are doing it to help them, not for professional reasons or because they think they would make better tenants. The reason for this is because there are only cons and no pros to renting for family unless it's to help them, that is why BTL lenders don't like it. I believe that's why you aren't getting the real life experiences you want as when people do it the situation isn't comparable and everyone else knows it's not a good idea to do it.

I know someone who rents to their single parent daughter on LHA. They do this so that their daughter and grandchildren can live in a nice house, with a garden and near them. It works in the way it was intended but they would make more money from renting to someone else. Before people comment about contrived tenancies, this passed as there was an ongoing letting business prior to the need developing.