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Renting to Friends: Managing the Blurred Lines Between Personal and Business

3 April 2024

Renting to friends may seem like a great idea for landlords. After all, trust is already established and who wouldn't want to do business with someone they like and respect? But the truth is that combining business with friendship can have both advantages and disadvantages.

Before Renting to Friends

Before handing over the keys to your property to a friend, it’s crucial to weigh several factors to ensure it’s the right decision for both your rental business and your personal relationship.

1. Lifestyle and Living Habits
How does your friend treat their homes? Are they neat, or do they tend to be messy? Are they the quiet type, or do they frequently host late-night get-togethers? Understanding their lifestyle is key to ensuring it aligns with your expectations and property rules.

2. Reasons for Renting
Are you looking to help your friend out of a tough spot? While it's noble to support a friend in need, remember that mixing financial and personal relationships can complicate things, especially if you have to remind them about rent payments regularly.

3. Financial Stability
Is your friend financially stable and reliable enough to pay rent consistently on time?

4. Planning for the Future
How will you handle any disputes or disagreements? How might your friendship be impacted if the rental situation doesn’t go as expected? Can you maintain open and professional communication about property-related matters without affecting your personal relationship?

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Pros of Renting to Friends

  • Trust and Familiarity: Renting to a friend means dealing with someone you already know and trust, providing a sense of comfort and security in your choice.
  • Ease of Communication: Discussions, planning inspections and maintenance visits can often be more straightforward due to the existing relationship.
  • Cost Savings on Advertising: Renting to a friend eliminates the need for costly advertising and property listings. This not only eases the financial burden but also speeds up the leasing process.
  • Potential for Reliability: Friends may be more committed to maintaining the property and paying rent on time to avoid straining the relationship.

Cons of Renting to Friends

  • Blurred Lines Between Personal and Professional: Friends might expect leniency with rent deadlines or property care, putting you in a tough spot.
  • Risk to the Friendship: Financial transactions and obligations can strain relationships, especially if issues like late payments or property damage arise.
  • Difficulty Enforcing Rules: Enforcing tenancy terms and conditions may become challenging, as friends might anticipate special treatment.
  • Reluctance to Report Problems: Friends might hesitate to report small issues, preferring not to trouble you. However, even minor concerns, such as a dripping tap, can escalate into major issues if not addressed promptly.

Do's and Don'ts When Renting to Friends

Just because you're friends, there are still legal obligations and rules that you need to follow. So remembering to keep things fair but legal is important.


  • Draft a Formal Tenancy Agreement: Ensure all terms are clearly defined in a legally binding lease, just as you would with any other tenant.
  • Establish Boundaries: Set clear expectations about rules, rent, maintenance, and responsibilities from the start.
  • Prepare for Tough Conversations: Be ready to address any issues as you would with a regular tenant to maintain professionalism and protect your investment.

Maintain Clear and Professional Communication: To help distinguish between personal and professional interactions, utilising a property management platform like myRent can establish a clear boundary, ensuring communications about the property remain structured and business-like.


  • Offer Special Treatment: Avoid giving a “friendship discount” or being lenient with lease terms, as this can lead to complications and misunderstandings.
  • Neglect Regular Inspections: Continue to inspect the property as scheduled to ensure it’s being maintained properly. Your insurance policy might require you to produce inspection reports if any claims are made in future.
  • Skip the Screening Process: Conduct background and credit checks to avoid future conflicts, even if you think you know them well.

It may seem overly formal to screen a friend, but it's essential for catching potential issues early. This step underlines the professional nature of your agreement and meets any insurance requirements, even when helping out a friend.

Renting to a friend can be tempting due to trust and familiarity, but it's essential to approach this decision professionally. Evaluate factors carefully to determine if it's likely to be successful or lead to complications that could damage your friendship. Use best practices to be a good landlord and friend, creating a positive experience for both.

The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice, you should seek independent legal counsel. does not accept any liability that may arise from the use of this information.

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