I am often asked, “Should I rent out my house?” The question usually comes up when someone is unsure about selling, when a home sits vacant during probate, or when it has been on the market longer than expected. Renting can feel like a practical solution.
My answer is always the same: it depends. Even with an excellent tenant, being a landlord requires time, oversight, and a willingness to address maintenance issues promptly.
The next question is more delicate: “Should I rent to a friend or family member?” On the surface, it sounds ideal. The house stays occupied. Someone you trust keeps an eye on things. There is no need for background checks or formal applications. And emotionally, it feels good to help someone you care about.
In my experience, however, one of the most costly mistakes a homeowner can make is renting to a friend or adult child without a written lease. When there are no clear terms, expectations blur. What begins as generosity can slowly turn into neglect, resentment, or financial loss.
Over the past year, I worked with several clients who learned this lesson the hard way. One homeowner allowed his daughter to move into his $180,000 home with only one requirement: she would cover the utilities. His intention was simple. He wanted to give her breathing room to get ahead financially.
Unfortunately, small problems became expensive ones. A dog damaged the flooring beyond repair. A slow plumbing leak went unnoticed and led to drywall and paint repairs. Routine upkeep was deferred. Landscaping deteriorated. Meanwhile, the roof and mechanical systems aged without maintenance. By the time she moved out, the home’s value had dropped to roughly what was still owed on the mortgage. Years of equity had disappeared.
The difficult truth is that good intentions do not protect an asset. Written contracts can.
If there had been a basic lease requiring a security deposit, monthly rent, inspections, and a clear pet policy, the outcome may have been very different. A written agreement creates accountability. If the parent still wanted to help financially, the rent could have been set aside and returned later, less any legitimate repair costs. The key is that the house would have remained protected.
A Practical Example
When I helped my son purchase his first car, I took a similar approach. I asked him to first draft and sign a written agreement outlining the purchase price, the down payment, the repayment timeline, and several performance expectations tied to school and work.
We called it a Mother’s Love Loan. I still keep a copy of it today.
It was a one-page document. it did not include pages of legal language. The document simply clarified the financial terms and what was expected in return. He fulfilled his obligations, and the experience reinforced something I already believed: clarity preserves relationships.
If you are considering renting your home to a friend or family member, do not skip the paperwork because it feels awkward. A lease is not a sign of distrust. It is a tool that protects both parties and keeps expectations aligned.
I offer standard lease templates and pet addendums to my clients.
But more importantly, taking the time to put terms in writing can protect your equity and, just as importantly, your relationship.
