It might seem like a great idea to rent a property to a friend or family member but beware - unless you lay the ground rules very carefully it could get messy.

Renting to friends and family isn't as rare as you might think - for a start quite a few parents buy properties for their children when they go to university. It's an investment that means their offspring are looked after and it should deliver decent capital growth into the bargain.

And if you've got a property coming vacant and a friend wants to move in then great - you've just saved yourself the cost of finding a tenant and helped a friend into the bargain.

Be careful

The problem is the dynamics change compared to renting to strangers and it's all down to expectations.

You'll be expecting friends and family to take more care of your property while they may be expecting special treatment from you, compared to the way you'd manage an 'ordinary' tenant. That all makes it harder to lay down the law when things go wrong.

Lay down ground rules

So whereas you might be expecting renting to friends or family to be easier than dealing with strangers, the opposite is often true. You need to make absolutely sure where the boundaries lay, what you can expect and what they can expect of you.

Top 5 tips

• Don't be tempted to skip the tenancy agreement and inventory.
• Be clear about the bills you are covering and those the tenant should pay.
• Draw dividing lines about fixing problems and repairing damage - in particular you need to be clear that the tenant is responsible for breakages.
• Make sure the tenant is aware when it's ok to contact you and discuss how it will work day-to-day - will your friend and family member think it's intrusive if you keep popping over, or will they think you're being standoffish if you don't?
• Make sure your landlords' insurance covers you for liability if you rent to a family member - it should do, but it's worth checking.
• To be honest these are things you should do with any tenant, apart from number 4 perhaps. But when things get tricky with friends and family there's a relationship at risk as well, so take even more care than usual with laying down ground rules.

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