San Juan Capistrano, CA · Member since 2011 · 114 posts · 34 votes
Good morning fellow BPers.
I have a unit where I've rented to the same gal for 3 years. She has been an ideal tenant--very clean and rent is always on time. Two months ago her boyfriend moved in who is an architect. He asked to do lots of upgrades to the inside of the unit, which usually makes me very hesitant. Although, after he helped me use his table saw to cut some screen doors I saw how meticulous he was.
He asked to install new cabinets throughout the kitchen. He has friends in the cabinet business who would give him the materials and he would do the install himself (ie. no charge to me). Well, I let him install the cabinets and they are beautiful. I mean perfect... I couldn't find a flaw.
Should I reward him in some small way, such as $100 off a month's rent? Or just thank him and leave it as mutually beneficial work.
What do you think gang?
PS. He wants to do more upgrades at no cost to me, all materials and work will be reviewed by me first. Someone pinch me!
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
14y
I would be very careful about monetary rewards. You do not want them to become expected anytime they do something. I would say when you find out the finally want to move out (hopefully years from now) say your last couple months are on me. Thanks for being such great tenants.
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
14y
First off that is fantastic! I am trying to think of any negatives/questions:
1) How does he get the cabinets free? I can understand a nice discount, but free? It would be bad if he was installing stolen goods on your property.
2) What happens when he does something you do not like? Everything is all good until there is a disagreement...just make sure you have a plan for when this happens because it is a possibility.
If everything is legit, which it sounds like it is I would start by offering as long term lease as they would sign :). Second, I would probably just thank them for now. Perhaps whenever they do decide to leave you can give them a small reward for the work.
Investor · -, IL · Member since 2010 · 409 posts · 616 votes
14y
Make sure to have him sign something saying the upgrades stay when they move out. It would suck if he took the cabinets with him since he supplied them and installed them.
Note Investor · garwood, NJ · Member since 2010 · 63 posts · 6 votes
14y
Scott J. i agree with Ryan B. As long as everything stays you can reward them.Do not lower the rent but maybe find another way to compensate them. maybe it would be better if you give a month free then lower rent 100 for a long time.Or buy them a gift or something.
Real Estate Investor · Los Angeles · Member since 2011 · 55 posts · 11 votes
14y
I think $100 off one month's rent might actually send the wrong signal. It's significantly less than he spent doing the work including his time, which I'm sure is not cheap on other jobs. Imagine if you'd done $1,000 worth of work and someone tried to offer you a $100 discount. I might take it as a slap in the face.
I would thank them and maybe offer the long-term lease that James Vermillion mentioned. Obviously she's planning on staying for a long time and he obviously thinks he'll be around for a while too ;-).
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
14y
I would be very careful about monetary rewards. You do not want them to become expected anytime they do something. I would say when you find out the finally want to move out (hopefully years from now) say your last couple months are on me. Thanks for being such great tenants.
Investor · Los Angeles, CA · Member since 2011 · 242 posts · 61 votes
14y
Sounds good to me.
A similar situation happened to me. The renters fixed up the kitchen with new counter tops and tile and it looks great. Surprisingly they moved out only a year and a half later. Things happen so whatever you do don't do it on the basis they will stay forever.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
14y
Had an architect move into a fixer unit and the deal I made with him was this: I would rent at a low rent to him and he was free to do whatever he wanted and once the place was improved, he could stay on with low rent as if it wasn't fixed up. There were normal small inflation type rent increases along the way. He stayed 10 yrs and left me with the coolest designs, new countertops and awesome custom paint job. He was very creative.
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
14y
I would not offer any financial reward directly tied to work done. This would set up a potential for expectancy of remuneration in the future. I would praise the work that was done, let them know how much you appreciate them taking such good care of the property and even send them a gift as a thank you either soon after completion or upon renewal of their lease.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
14y
Maybe a gift card to Home Depot or ? that would help defray costs for some of the odds and ends, new tools, etc. Or, you might buy them a gift certificate for a nice restaurant. As for them taking the cabinets, etc., in California, anything attached to the walls are considered permanent and stay with the property, probably the same where you're at.
Grays, Essex · Member since 2012 · 37 posts · 3 votes
14y
I wouldn't use a financial reward linked to work done. It may set a precedent with the tenant "finding work" to do with the expectation that it will result in a benefit to them.
For me (call me a skeptic!) I don't understand why someone would want to invest in a rental like this without some underlying reason. Perhaps they're looking to sweeten the situation to buy the house? Perhaps the "free" materials are the proceeds of something undesirable? If it is all completely legit, you've found a dream tenant, but what if it isn't?
If these "free" materials have come from illegal means and this guy is caught, you could find the authorities knocking at the door of your property to rip it all out! I think it pays to be cautious and to consider the situation carefully. If something seems to good to be true, it usually is, and if you reward these things, you not only take money out of your bottom line, you also risk having to make good any problems that arise.
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
14y
I agree with not tying a monetary reward to work done, it sets a precedent. you can give them a gift, or free rent in appreciation at the END of the rental term. Consider giving them upgrades that add to the value of the unit, so that you both benefit, and perhaps gift cards to their favorite places. HD gift cards sound good too, for odds and ends, and tools.
I wouldn't reduce the rent long term, but $100 for new cabinets with meticulous workmanship does sound cheesy.
Involved In Real Estate · Las Vegas, NV · Member since 2010 · 341 posts · 86 votes
14y
What does they enjoy doing together? Perhaps buying them a round of golf or getting her a spa treatment. These little things oftentimes mean a lot more than a couple Benjamin. It will build rapport withe the tenants even more.
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
14y
Ask him if there is any cabinet hardware that he might like but can't get for free and spring for them - as long as they are no too expensive.
I wouldn't offer any money because they already did it with no expectation. These people are treating the unit like their home and consider the joy of doing the work and enjoying their craftmanship the payment for their labor.
Do make it clear that the cabinets stay or the old ones go back in as if nothing changed before they move. You can do this in a friendly way.
Rental Property Investor · Englewood FL & Prior Lake, MN · Member since 2012 · 112 posts · 33 votes
14y
New cabinets add real value to your property. I would give him something significant as I'd appreciate the work done. It would encourage them to do more and make the rental feel like a home and they would tend to stay longer. Something on the order of one quarter to one half of the value of the improvement would seem right to me.
Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
14y
I recently had a tenant install a full bath in the basement of a TH that I rent to them. There was only a "rough-in". It's beautiful. They also asked to bring their stainless appliances when they moved in. I used the existing in another property.
My plan is to have my lawn guy go over and do a nice trimming and mulching and put in some annuals - as a surprise. Tenants like a nice little upgrade or something extra now and then.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y
People, you're missing an important point - the tenant's motivation in doing this. It isn't the added rewards - otherwise the tenant would have probably tried to negotiate something ahead of doing the work. This tenant just wanted to have something nicer, and was willing to provide that on his own. Every now and then it can happen. And him being an architect, he gets to practice at home too. he'll probably do more just for the practice!
Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
14y
Originally posted by Steve Babiak:
People, you're missing an important point - the tenant's motivation in doing this. It isn't the added rewards - otherwise the tenant would have probably tried to negotiate something ahead of doing the work. This tenant just wanted to have something nicer, and was willing to provide that on his own. Every now and then it can happen. And him being an architect, he gets to practice at home too. he'll probably do more just for the practice!
I did not miss your point:
Originally posted by Brian Hoyt:
These people are treating the unit like their home and consider the joy of doing the work and enjoying their craftmanship the payment for their labor.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
14y
Steve Babiak, you're right. However; in the same manner, that doesn't mean the property owner can't show appreciation by giving them a gift certificate or dinner, etc. What goes around, comes around!
Investor · Union, NJ · Member since 2011 · 838 posts · 295 votes
14y
I don't reallyt see the difference in say a 100 dollar home depot card, or 100 dollar spa gift cert. VS the 100 in cash. Both have monatary value and personally I have found that tenants prefer to spend the money where they want or perhaps they would likek to be able to save it.
The 100 dollar amount was just an example. I would probably even give more if someone came in and installed custom cabinets for free?
To me that is a huge improvement and value has been added for a long time to come. They should how appreciated it is, even if it was done without expecting anything.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
14y
As Steve Babiak said, the tenant that wants something nicer is willing to do it for themselves. I had tenants discover hardwood floors under the old carpet of our rental. They asked if they could remove the carpet and refinish the floor. They did a good job. My husband and I gave them 2 window air conditioners to use as long as they live in the house. Win/win, and no further expectations.
Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
14y
Aly, you just reminded me that years ago I had a tenant refinish the floors (beautifully) and install central air (I paid for the unit). I think that I gave them a free month's rent.