Can I rent a house to a friend on benefits?

Keen_Investor

As the title says. I have a friend on Benefits, his housing benefit is paid for.. he's on Personal Independence Payment, I won't go into the details why that's his business.

He's in no way related to me. I'm considering buying a flat in cash and renting it to him for the going rate. It appeals to me as I've known him for 20 years and trust him. Albeit I would still keep it completely legal with tenancy agreement etc.

Just wondered if there were any laws/rules preventing this.

Cornucopia

Does your lender (if you have one) allow Benefit Claimant tenants?

Comms69

Keen_Investor wrote: »

As the title says. I have a friend on Benefits, his housing benefit is paid for.. he's on Personal Independence Payment, I won't go into the details why that's his business.

He's in no way related to me. I'm considering buying a flat in cash and renting it to him for the going rate. It appeals to me as I've known him for 20 years and trust him. Albeit I would still keep it completely legal with tenancy agreement etc.

Just wondered if there were any laws/rules preventing this.

Check the lease, otherwise no.

Annie35

It's just down to lender &/or building insurance requirements. Got those sorted you're away!

Take the time to browse pims or nla sites, so much info on being a landlord, even if you use an agents help it's good to have your own basic idea too.

I think someone will say don't lend anything to a pal you can't afford to loose' or some such advice so I'll say it first !!!55357;!!!56833;

Margot123

Check covenants, leases etc before agreeing, even in principle.

Also buy a crystal ball to look into the future so you can be assured your friend continues to receive enough income to pay you the going rent and then doesn't fall out with you when they can't pay.

Old adage 'business and pleasure don't mix' comes to mind. You may want to help your friend but it may sour the relationship in the future............it's your call.

need_an_answer

A large part of your problem might be that over time benefits don't keep up with "market rent" so what starts out as an achievable payment four your tenant becomes more difficult to afford as time goes on.

My guess is that at some point you will be faced with the situation of staying true to your friend or renting the property for the rent of other similar things

There can be quite a difference

You also need to consider all the factors that also come with being a LL it may not be as simple as you at first believe.

bobbymotors

You probably can rent it to him, but it's a bad idea to rent to a friend.

G_M

Check the lease if any.
Check the terms of the mortgage if any.
Check any covenants in the Title.
Check the terms of insurance.

But beware - letting to a friend, especially one on benefits, can lead to

* loss of friendship and/or
* poor business/financial decisions.

If there were arrears, would you evict your friend?

Now read:

* New landlords: advice, information & links

[Deleted User]

If you want a buy to let, you don't have to rent to your friend.

Is your friend financially stable? Does he/she make good choices when spending money? Will rent come before anything else if a problem occurs (it easily can when on benefits, just as when in work)?

Do you know what your responsibilities will be as a LL? Does the area you are thinking of buying into require LL registration?

Could you make more money investing the money you would spend on a property, without the hassle being a LL brings?

davidmcn

I keep reading this as "friend with benefits", which would at least be more interesting.

G_M

would certainly spice up the forum a bit...