Dave Ramsey sends blunt message on housing costs

In most of the U.S., owning a home entails higher monthly costs than renting, as homeowners face costs such as insurance, taxes and maintenance.

There are some exceptions — notably a few cities in Florida and Arizona — where the math is flipped and renting is more expensive, but the overall trend remains.

As Americans struggle with this reality, personal finance author and radio host Dave Ramsey offers advice about one way people with the means attempt to help others deal with the pressure of high housing costs: renting to friends and family.

This approach may seem like a convenient and compassionate choice, but it often blurs the line between personal and professional responsibilities.

Landlords who mix business with personal relationships risk damaging both, warns the American Apartment Owners Association (AAOA).

While the idea of helping someone close to you by offering them a place to live might feel rewarding, it can quickly lead to unrealistic expectations, strained relationships, and legal complications.

The AAOA strongly advises landlords to maintain clear boundaries and treat all rental agreements with the same level of professionalism — regardless of who the tenant is.

Why renting to friends or family can be problematic

There are several cautions about renting property to friends and family of which the AAOA urges landlords to be aware.

Unrealistic expectations: Friends and family may expect special treatment, such as waived fees or leniency on rules.
Increased demands: Personal tenants often request more frequent or minor maintenance, assuming priority due to the relationship.
Emotional pressure: Saying “no” to someone you care about can be emotionally difficult, especially if they’re in a tough spot.
Risk of conflict: Denying perks or enforcing lease terms can lead to resentment, damaging both personal and professional ties.
Legal gray areas: Even informal arrangements can lead to legal complications, including the need for eviction if the person refuses to leave.

Bestselling personal finance author Dave Ramsey urges diligence and caution when renting homes to friends and family.

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Dave Ramsey has blunt advice on renting to friends and family

An advice-seeker identifying himself as Justin asked Ramsey about renting a home in his duplex to a friend.

“I’m 29, and I’m about to buy my first home. My plan is to buy a duplex, and rent out the other side to help pay down the mortgage quickly,” he wrote in an email sent to TheStreet from Ramsey Solutions. “A good friend, who is like a brother to me, wants to be my renter. But I’m worried this might jeopardize our friendship at some point in the future. What do you think?”

Ramsey congratulated Justin on his home purchase and expressed hope that the closing process moves quickly and smoothly.

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“Now, let’s get to the real question, and how your friend plays into things,” Ramsey wrote. “The kind of arrangement you’re talking about can work. But to be honest, I’m afraid the odds aren’t in your favor.”

“No matter how long you’ve known each other, or how well you get along, you always face the risk of running into a situation that can damage the relationship when you do business with friends,” he added.

Dave Ramsey emphasizes being clear about rental expectations

Ramsey stressed the importance of making sure the rules for a landlord renting an apartment to friend are thoroughly understood by both.

I do lots of business with friends. But before anything happens, I always make sure the specific requirements and expectations of our relationship are laid out very clearly. In writing. And in your case, I’d start making sure the ground rules are completely understood now.

Ramsey clarified a specific example of an instance where the rules must be understood in advance.

Ensure that he understands he absolutely must come talk to you ahead of time if there’s even a chance he might be late with the rent. Most problems between a renter and landlord can be worked out if both parties are mature and reasonable. But you’re not running a charity here. This needs to be emphasized in a very firm, but very kind, manner.

Dave Ramsey explains one fact about renting to a friend

Ramsey has a simple piece of advice about taking on a friend as tenant in a rental unit.

“The truth is friends sometimes have unrealistic expectations of each other,” Ramsey wrote. “The friend who is renting may think he’ll get some slack on the payments. The friend who’s the landlord may assume the renter will be a perfect tenant. These are both dangerous assumptions that need to be addressed before anything is signed.”

“Just be straightforward and fair. Make sure the rules are completely understood by everyone involved,” he added. “Then, if you ever have to enforce the rules, do it gently — but firmly.”

Alternative ways to help friends without renting to them

Instead of renting property to a friend, the AAOA offers these suggestions:

Short-term stay (without lease): Let them stay temporarily in a vacant unit, but be aware of potential legal implications based on state laws.
Offer financial support: Help with a deposit or first month’s rent elsewhere, rather than becoming their landlord.
Connect them with resources: Recommend housing assistance programs or other rental options that suit their needs.