discount rent for family?
Assuming you need the income, how much would you discount monthly rent charge for a close friend or family member? 1.5 br, 1 bath, newly renovated in Park Slope might go for something like $2,100 in the current market. What’s a fair discount knowing that a tenant is trustworthy and will pay rent (sort of)…
Assuming you need the income, how much would you discount monthly rent charge for a close friend or family member? 1.5 br, 1 bath, newly renovated in Park Slope might go for something like $2,100 in the current market. What’s a fair discount knowing that a tenant is trustworthy and will pay rent (sort of) on time?
bigger problem is going to be how you handle rent increases. that’s always hard to do with good tenants, but will be tough to work out for friends/family. i would make sure you discuss that upfront not that you aren’t guaranteeing the current rent whatever you decide to do. the other thing you could do is try to get them to do you some favors as well; ie: take out trash, snow shovelling, etc.
5% discount to friends or reliable long term tenants.
10% discount to close family.
It’s worth giving a break to people you like for peace of mind.
I’d be making a lot more if I didn’t do this myself, but I’d also have more headaches and be rerenting apartments more often
That is my worst nightmare. A friend of mine who is a very good, interesting, brilliant and very flaky person became fascinated with the idea of living in my newly renovated building and it struck the fear of God in me. She forgot about it, thank God, but the only thing I would hate more than turning away family and friends is having family and friends for tenants. NOT!
I think if you want to give them a discount that is your personal choice but one thing to consider is that if you give too much of a discount it can have adverse affects on your taxes. Usually when first purchasing a two family house you will end up with a huge deduction on the rental portion of the property b/c of depreciation. If the rent you are charging a family member is not considered market rent you won’t be able to take that deduction. I would discuss this issue with an accountant before having your relatives sign a lease. In the worse case you could have a lease that has them paying a higher rent and maybe sometimes you just give them some ‘cash’ back.
We rent to a family member and set the price a little below market, close to what she was paying before. We’ve negotiated rent increases when we’ve made improvements. She is a wonderful tenant and, given the intimacy of renting out a portion of your home, we are so much happier having her as a tennant than when we had strangers. We can yell up the stairs to our kids and joyfully share the yard. We watch each others pets and live together yet very separately. Doors are closed and people knock.
We know the money issue could be a problem but if she couldn’t pay her rent elsewhere, we’d probably be helping out anyway. We also know that having her as a tenant isn’t business; it’s family. We do not regret it.
Yes, you are right, a friends and family discount is the norm. (And also a recipe for disaster).
wow – these responses all appear to be in the same vein – we definitely need the money to pay off the mortgage. just thought a friends and family discount was the norm. thanks to all.
a landlord that rents in his or her own house sets the rent based on market value and their personal budget. If 2100 per month helps them pay the mortgage, tax, insurance, water, heat and general maintainence, then why should they lower the rent for a friend or family?
Never ,ever rent to friends or family .
you will regret it