I’ve had both good and bad experiences loaning out money to family members, but renting from them and paying their mortgage is beyond my comfort level. In theory it should all work out fine (after all, you’re blood right?) but in the real world people tend to get hurt or taken advantage of.

Unfortunately, an ol’ college friend is experiencing just that – getting stepped on because he doesn’t want to ruin his relationship with both his brother and his dad. My friend means well, but it’s time he starts to consider his options before he loses even more of his sanity…and money! Here’s a play by play of what’s going on:

• My friend Good Brother (as he shall be named from this point forward) decided to live with Bad Brother and pay him rent (aka part of Bad Brother’s mortgage) as well as 50% of the utilities.
• For 2 years Good and Bad Brothers were happy.
• Then one day Bad Brother decided to go back to school and move half-way across the country.
• Good Brother was sad to see him go, but happy Bad Brother was pursuing his dreams.
• Bad Brother asked Good Brother to help him fill the occupancy while he’d be gone (2+ years), and since Good Brother is, by nature, Good, he had no problem helping him out.
• Good Brother tried and he tried and he tried, but the recession had finally hit and he couldn’t find a suitable renter. It had now been THREE months and it just wasn’t working.
• He explained to Bad Brother that his asking price was too high (all the while paying 100% of the utilities now), and that his brother needed to lower the price and the rental terms.
• Bad Brother wasn’t having it and decided to try himself – only Bad Brother was more talk than he was action (and Good Brother didn’t realize he was being taken advantage of yet) so they let ANOTHER three months pass only to remain where they originally started- without a 2nd renter.
• It turns out another culprit had come into play – lack of motivation. The reason? Crazy Dad.
• You see, trying to make things better and “help out,” Crazy Dad had decided to subsidize the amount of the 2nd half’s rent so that his son (Bad Brother) would have enough to pay the mortgage each month. While nice in theory, this has only caused more delays in finding a roommate as the sense of urgency has quickly disappeared.
• On top of it all, Crazy Dad and Bad Brother believe Good Brother needs to be held responsible for filling the vacancy – family duties and all.
• Good Brother is now pissed.

As it stands – now SIX MONTHS later – Good Brother is still paying 100% of the utilities & the vacancy has yet to be filled. Only now, Good Brother is starting to realize that it’s not his responsibility to find this elusive roommate, and he’s thinking of moving out. Why should he continue paying an extra $150 every month or continue getting bashed for not finding a roommate? Is this really HIS responsibility? Personally, I think not. The one who owns the house should be the one maintaining and paying for it – no one else. Ask his father or brother, and they’ll tell you differently though.

Now, there’s probably more to it than what Good Brother tells me, but the reason I post all this is to illustrate the importance of being careful. Mainly, being careful when it comes to mixing money with family members. Some of the times things work out great! But it’s those other times that really put a strain on your relationships, and the times I hope you’re able to avoid.

So please please PLEASE think it through when considering money arrangements with your loved ones. If you decide to go for it, write down in complete detail the arrangements you’ll be making so everyone’s on the exact same page. We all think it could never happen to us, but money has a strange way of breaking families apart. So please, be careful out there :)