Namely, my sister. 
She has asked if (when our current tenants lease expires) we would rent our IP to her. We are seriously considering it. I don't know if I am crazy or what.
She is a young single mum. I know she would be a reasonable tenant (at least she has been for every other landlord). She has a fair bit of trouble finding rentals in Canberra due to the fact she is young, single and has a child - and lets face it LL's here can generally afford to be choosey.
We would be renting the property to her at less then it's current rate, however our money in hand would be the same as we would self manage - and the reduction would be in line with what the PM is paid. The rent itself would still be within market prices, just middle, rather then right at the top like it is now . We do not believe that there will be much room for any increases at it's current rent at the end of this tenancy (in fact some rents in the area seem to have dropped).
We would use a standard lease, and bond, etc.
Our primary concerns:
*rental payment on time. This is our biggest concern. This has never been a problem with her for past rentals, but there is a possibility that she may think she should be entitled to special concessions if things are tight, because we are family. We would look at having the rental payment direct debited the day after her payday on a fortnightly basis. (We also know mum and dad would bail her out financially if she got herself in trouble, and I have no problem being hardarse with her, and going throught the normal eviction proceedings etc - but it wouldn't make for very harmonious family relationships).
*pets. She currently has a couple of cats, some fish and some lizzards - not a problem. I do think that she will want to get a dog though (I know my sister and it would be kept outside, but this is certainly something I would need to talk to her about).
*future flatmates / boyfriends moving in. At some point it is very likely that she will want her boyfriend or some other faltmate to move in. Again this is a risk that would exist with any single tenant. We would want to check them out, and at this point I am not sure whether we would be better to have them put on the lease as well, or not. If she weren't my sister I would be insisting on it definitely - which makes me think that it is something I should still insist on. Also if a flatmate were to move in to help her with costs - I would want the rent to increase so that we weren't giving her a discount.
*rental increases - how will she react when her big mean sister decides that it is time for a rental increase. I cann't see it happening too soon, but it will certainly at somepoint.
Is there anything else which could potientally be a problem created by our relationship?
I am just trying to go through all the possible problems etc. Once I have thought about it properly I intend on talking to her in depth about these potiental issues and see if we can come up with some groundrules before we decided whether we wish to go down this path.
The Pro's -
*we have potientially a good long-term tenant - I beleive she will stay on as long as she can afford the rent / or until she wises up and decides that she should save a deposit for her own place (not likely anytime soon).
*We will have oppertunities to keep an eye on and maintain the property. Getting access will not be a problem for maintaince or inspections.
*Rent will still be within market range (albeit lower then current price),
*we will not have to deal with or through a PM (although, ours still provides individual one off services - like property inspections - if we wished to engage these services).
****If it weren't for the fact that she was my sister, I would certainly think she was a decent applicant.
She has asked if (when our current tenants lease expires) we would rent our IP to her. We are seriously considering it. I don't know if I am crazy or what.
She is a young single mum. I know she would be a reasonable tenant (at least she has been for every other landlord). She has a fair bit of trouble finding rentals in Canberra due to the fact she is young, single and has a child - and lets face it LL's here can generally afford to be choosey.
We would be renting the property to her at less then it's current rate, however our money in hand would be the same as we would self manage - and the reduction would be in line with what the PM is paid. The rent itself would still be within market prices, just middle, rather then right at the top like it is now
. We do not believe that there will be much room for any increases at it's current rent at the end of this tenancy (in fact some rents in the area seem to have dropped).We would use a standard lease, and bond, etc.
Our primary concerns:
*rental payment on time. This is our biggest concern. This has never been a problem with her for past rentals, but there is a possibility that she may think she should be entitled to special concessions if things are tight, because we are family. We would look at having the rental payment direct debited the day after her payday on a fortnightly basis. (We also know mum and dad would bail her out financially if she got herself in trouble, and I have no problem being hardarse with her, and going throught the normal eviction proceedings etc - but it wouldn't make for very harmonious family relationships).
*pets. She currently has a couple of cats, some fish and some lizzards - not a problem. I do think that she will want to get a dog though (I know my sister and it would be kept outside, but this is certainly something I would need to talk to her about).
*future flatmates / boyfriends moving in. At some point it is very likely that she will want her boyfriend or some other faltmate to move in. Again this is a risk that would exist with any single tenant. We would want to check them out, and at this point I am not sure whether we would be better to have them put on the lease as well, or not. If she weren't my sister I would be insisting on it definitely - which makes me think that it is something I should still insist on. Also if a flatmate were to move in to help her with costs - I would want the rent to increase so that we weren't giving her a discount.
*rental increases - how will she react when her big mean sister decides that it is time for a rental increase. I cann't see it happening too soon, but it will certainly at somepoint.
Is there anything else which could potientally be a problem created by our relationship?
I am just trying to go through all the possible problems etc. Once I have thought about it properly I intend on talking to her in depth about these potiental issues and see if we can come up with some groundrules before we decided whether we wish to go down this path.
The Pro's -
*we have potientially a good long-term tenant - I beleive she will stay on as long as she can afford the rent / or until she wises up and decides that she should save a deposit for her own place (not likely anytime soon).
*We will have oppertunities to keep an eye on and maintain the property. Getting access will not be a problem for maintaince or inspections.
*Rent will still be within market range (albeit lower then current price),
*we will not have to deal with or through a PM (although, ours still provides individual one off services - like property inspections - if we wished to engage these services).
****If it weren't for the fact that she was my sister, I would certainly think she was a decent applicant.
