How to Deal With Letting Your Property to a Friend (and Avoiding an Awkward Situation)

What would you do if a friend or work colleague, who you've known for ages, is about to rent your property from you?  What referencing checks should be carried out? And how do you go about it?

Letting out your property to a new tenant is tricky enough, but what about renting it to someone you know well? How do you approach a potentially challenging situation and stop it from becoming an awkward one?

Supposing that, with all the best intentions, you’ve agreed your colleague is going to rent your property from you. You’ve know them for a long time, and you think that you trust them. But should you really go ahead with creating a tenancy without a bit more information than this?

Everything probably seems to start out well, but the unexpected sometimes happens … and perhaps your ‘trusted’ tenant can’t pay their rent. Were there any warning signs?

How to Deal With Letting Your Property to a Friend

Here are four simple referencing checks suggestions, to complete before starting the tenancy – and these are highly recommended to check the suitability of your potential tenant…


  • Tenant history

    Start by checking their tenant history – have they ever defaulted on their rent? While total security might not ever be achievable, a history of good tenant/landlord relationships can at least give you a good idea of whether the tenancy is going to work out for you.


  • Credit checks and outstanding debts

    Would a credit check show any issues and/or are there any outstanding debts that may highlight whether they’ve had any financial troubles in the past that might affect their payments? Trusted or not, it’s unlikely that even a friend is going to want to share something with you that might jeopardise their chances – unless they’re incredibly honest.


  • Income and other earnings

    Your colleague’s ability to keep up with rent payments is likely to be dependent on their income from their employer. Find out if your colleague’s employment is based on a fixed term or permanent contract. If it is fixed, when is the end date and will this guarantee a regular income which will support their payments to the end of the tenancy term?


  • Independent Referencing

    In order to get some clear perspective, independent referencing can allow for objectivity and add some extra reassurance that your tenant is reliable and trustworthy.  It will usually show if the trust that you think you have in your colleague is clearly supported by others?


These four referencing checks are all indicators which can help a landlord to decide whether tenancy is likely to be successful. Hopefully, all of them will be dispel any concerns: good renting history, clear credit history, no debts and a long term or permanent employment contract.

But what happens if a late rent payment was based on something that just couldn’t have been expected or checked? Maybe your tenant becomes ill or is suddenly made redundant. What can you do?

Where an insurance-backed reference is obtained, you may be able to apply for rent guarantee insurance – this will make sure that rent payments are continued, should the unexpected happen.

It’s not about being suspicious or mistrustful. It’s about ensuring the best reassurance for you and your tenancy agreement…. especially where you have a buy-to-let mortgage and/or where high service charges and other bills are concerned!

If you’d like any more information about how independent referencing checks can help you, please just ask!

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