Has a friend ever asked you to be your tenant?

i had a relatively good friend ask me yesterday to be a tenant in my IP

He lives near me now in inner city .

We go out a few times a week for breakfast meeting etc .

He's younger than me and in his 30's and earns double my annual salary,he earns about $120k
He has a BMW Sports he is paying off plus rents a carspace for it.
I dont own a car

He goes to Bali , Phuket twice a year.


He buys Armani suits , has a collection of sunglasses,, gets facials, suntan clinic, buys expensive deoderants , a t shirt would cost minimum $100 for him , etc etc .
He still goes to nightclubs every weekend .
A haircut at a place called Ziggys cost $199 !!!

The other day at breakfast in his favourite inner city cafe( expensive) he boasted about his clothes and my worn clothes., his singlet was some brand name and sunglasses , his white leather shoes with no socks were $699 ,whilst i had a pair of shortts , kmart t shirt and thongs on .
Sure I had some yuppies in the cafe looking at me, leering at me ,dressed in their $200 tight Calvin Klein t shirts eating their smashed avocado on toast and french coffee, probaly thought that guy is homeless, but they are still probaly renting their inner city apartment whilst I own 3 ,so stuff them.!!!

The other day i lent him $300 as he was short , i get about average $800 a week whilst he gets around $1800 a week clear.

Im actually 'saving up " to buy a yellow toaster !!!!


He has asked me to be a tenant in my city IP and he will pay standard rent .
But asked me to self manage .with no lease.

This is where im in a confused place, if he doesnt pay then we are going to fight
He has offered me a months bond etc

I keep telling him not to waste money on material things like $1500 watches when u don't need them , gold chains around your neck, brand name shorts with white leather shoes and no socks.
He has promised to budget now to pay the rent im asking and said he will pay it .


This is where the problem lies... I lose a friendship if he doesnt pay plus he doesnt want a actual lease ?
I like him he has been a good friend to me in the past and stuck by when others havent.,
but i need to pay down these IP's too .

 

I made a rule early in our investing: Only rent to friends and relatives if they do it through a PM. They can apply, sign a lease, pay a bond and call the PM for any maintenance issues. They can't call me, it's a business.

No formal lease = no LL insurance = no deal.

 

NEVER rent without a lease agreement.

Even if he pays you cash. He could sign for 3 months then goes week to week from there. With no lease there is no contract, he can stay and not pay and you will have difficulty getting him out.
I have rented to a friend but still had a contract.
I would not rent to someone as irresponsible as someone who has to borrow money of someone to get through the week.
A BIG NO!! for him. Tell him you can't rent it without a lease due to regulations on the loan (not entirely untrue as the bank calculates your earnings with the rent included but won't if it's not in writing).

 

@Propertunity has it nailed.
Friends and business don't mix.

If they insist, it has to go through all proper channels.
No special treatment for friends.

 

Interesting that this article comes out on the same as this thread.

Is renting to family or friends ever a good idea?