Weddingbee boards

You ladies always have some great insight, so I thought I'd see what you all thought. Sorry for the lengthy explanation!

I own a house with my sister. She lives there, I live with my husband, but she is moving for a new job and the house will soon be empty. It is also currently for sale. 

We have decided to rent the house out to help with the bills, and here's where I need some suggestions:

We can either rent the house through our agent or rent to a friend. 

The pros to renting to our friend: He is a police officer (trustworthy, good for the neighborhood, has a steady job), he can continue to show the house to potential buyers, I know he will take care of things like the yard and any maintenance, and we can keep our homestead exemption. My sister can also keep some of her things there, and stay the night if need be (she works for a university and sometimes has to work at different campuses). 

Cons to renting to our friend: He is currently going through a divorce, his wife is keeping their house, but he's still having to help her make payments for now, so he can only afford about $400/month. This is less than half of our mortgage/insurance/taxes, but it is better than nothing. But he did suggest that he could try to find a roommate (who would likely also be a policeman). 

Pros to renting through agent: It would really just be that we could likely bring in closer to $800/month (but there would also be a 10% charge for management + 1 month's rent for commission). 

Cons to renting through agent: We won't know the person, if we "officially" rent, we can't have the house for sale at the same time, we will lose our homestead exemption, and renters are far less likely to take care of the house than our friend. 

So that's where we are at right now. Thoughts? 

@heathaah: I live about 40 minutes away from the house, and once my sister moves, she'll live about 2 hours away. I really don't want to have to deal with managing it alone (since I'm closer, it'll be my problem if something breaks), and because it's currently for sale, I have a contract I can't get out of with my agent. 

First of all, what Crayfish said.  Don't risk losing a friendship over a rental.  Second, use the agent.  I've been a landlord and it's not only time-consuming to screen and vet potential renters, it's a real crapshoot.  I'd rather have someone else responsible for doing that, plus they are professionals.  They've seen it all and can probably recognize potential problem renters better than you can.

I see a huge potential for conflict with the scenario of you renting to your friend and requiring him to keep the home ready for showings. That is very draining on a person and I forsee that as time goes by, he will be less and less inclined to keep the home as tidy as you expect, especially if he's a bachelor with a male roommate. Plus, that is a conflict of interest; if he puts forth the extra effort to help sell your house, then he's out of a cheap home. It would be in his own best interest to not help you. And what are you going to do if he doesn't keep the home ready for showings? Kick out your friend? It sounds like a bad scenario all around.

Totally agree with crayfish, don't mix friendship and business. Also, I'm not really sure how your friend would be able to continue showing the house if you're renting to him? Would it be a temporary lease?

I think it's better to just try to sell the house for now and if it doesn't work out then find a renter. Yes, you may not know the person but you need to do a credit and background check either way. Please don't skip this important step even if you decide to rent to your friend. He may be a trustworthy individual but people are not exactly up front about their finances and you need to be aware of his situation.

Thanks for your input ladies!

I am still undecided, but think I will get an idea from our agent on how long things are taking to get rented. I think if it is taking a while to get a house in our area rented, I'd rather just get him in it so it's not sitting empty. If it's been quick, then I'll probably want to list it instead. 

@bree72: Either way, make sure there is a lease. 

I said through an agent. 

We rented out first place through craigslist, it was the lower level of someone's home. And we had issues because it wasn't a legal contract, and in the end she had expected certain things that weren't in the lease. Like, she took out $100 from our damage deposit for carpet cleaning, and when I asked what was wrong with the carpet she said there was so much hair from the cat she had to get it cleaned. But she had agreed to the cat, and the least said normal wear and tear, I vacuumed once a week and really didn't find any cat hair when we left. She said we should have been vacuuming more often, um, you should have put that in the lease then. I dropped it eventually, but I was really mad when we left that she had made up all these crazy expenses and wouldn't give us back our deposit.

If you want them to take good care of the house, put it in the lease. State that the well-being of the property is important and request that they do certain cleaning procedures every so often. Schedule a once-a-month walk thru to be sure everything is being done the way you specified.

I agree with some of the other bees, don't mix your friendship with business, it becomes really sticky.