Having tenants 'manage' upgrades/repairs

Billings, MT · Member since 2021 · 51 posts · 11 votes

I just started reading 'Landlording in Autopilot' and just read about having great tenants take over cosmetic projects such as replacing carpet. In the book the author states this allows tenant to take ownership in their home and just creates a better relationship between tenant and landlord. He explains he has the tenant find the carpet they want and the installer and then give the bill to the landlord to write the check. I'm just curious if you more experienced landlords have ever tried this and what were the results? I'm on my first house and this concept makes me a little nervous! Thanks!

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Bob Okenwa

Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes

@Ethan Griffel

No, no, and no. If a tenant wants to have ownership in a property, they are free to buy their own house and replace any and everything their heart desires.

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Bob Okenwa
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Ethan Griffel
No, no, and no. If a tenant wants to have ownership in a property, they are free to buy their own house and replace any and everything their heart desires.
9 Reply
Ethan Griffel
OP
Billings, MT · Member since 2021 · 51 posts · 11 votes
4y
@Bob Okenwa I have to admit that was absolutely my first reaction when reading that as well! Thanks for the response!
1 Reply
Bob Okenwa
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Ethan Griffel
I understand the thought process behind it, but if you give tenants an inch, they'll more than likely take a mile. It starts with carpet and then evolves into making renovations/upgrades without your permission. Very slippery slope IMO.
5 Reply
Scott M.
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
4y
I could not disagree with the authors comments more. You can carpet a house for 1K or 10K and probably more. No consideration to cost? Autopiliot to zero ROI.
Best way to create a better relationship with a tenant is to be a good landlord, not a dumb one.
8 Reply
Ethan Griffel
OP
Billings, MT · Member since 2021 · 51 posts · 11 votes
4y
@Scott M. Agreed, that sounds like a very tenuous prospect at best. My biggest concern was cost management as well. Thanks for the input!
1 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
You could let go of the steering wheel in your 1992 Caravan and call it autopilot, but you won't end up where you wanted to go.
If the Landlord does not maintain control, many tenants will assume ownership of the property and decide to violate the lease six ways to Sunday.
The DIY Landlord Book4.7247 Reviews
Website View Page
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Sender Brickman
Member since 2022 · 4 posts · 16 votes
4y
Cash in on it, have the tenant write to you the details, and an amendment to the lease, for rent escalation!?
0 Reply
Felicia Lucco
Rental Property Investor · Phillipsburg, NJ 08865 · Member since 2018 · 48 posts · 24 votes
4y
Hi Ethan,
You should be nervous... Unless you know for a fact that your tenant has experience/skills, I would not allow them to do any repairs. (Choosing a carpet and having it professionally installed within a given budget should be fine.)
I once had a tenant who let me know of some cracks in the wall, then assured me that he could spackle them, and I didn't need to worry. Well! When I later saw the job he did, I was appalled. A 2 yr old could've done better. There was spackle everywhere (floor, door frame, etc) and none of it smoothed out or sanded. He ruined my walls! He also - for some unknown reason - used duct tape on the walls, which when removed took the drywall with it! Lesson learned! I then amended my lease to forbid anything other than a picture hanger to be installed on the walls and for absolutely no repairs to be done by the tenant. I suggest you do the same.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
@Ethan Griffel that is a great book and many newer books reference his core management strategies. This particular strategy, I have a split opinion on.
I agree with him that letting tenants make improvements to the property increases their attachment to the property and longevity as a tenant. Where I diverge is letting the tenant make the selection and contract the improvement. The problem is the tenant may pick an ugly color, poor material or bad installer. The other problem can be the cost to the landlord.
When a tenant gives me an improvement request, I determine the value to me and the property. Based on that determination, I determine a cost sharing proposal with the tenant. It could be 100% me, 50/50 or 100% them. Sometimes I ask them to pay for materials and I cover labor. I may give them options, but they are my predetermined options for color or materials. They pick between my options. I select the vendor and contract the work.
I have had too many issues with tenants picking bad colors or having poor quality work done. I know some landlords let tenants do whatever they want and in some cases the tenants take better care of the property than a landlord.
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Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Ethan Griffel the example you gave proves the opposite point. Laying carpet is skilled labor. It’s not rocket science, but it can be done well or poorly. What type of carpet? All grades and styles available. Panels? Fasteners? I could go on.
Wouldn’t you rather have someone who does this dozens of times a month vs. an u trained person doing this once?
1 Reply
Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Ethan Griffel oops, saw they were hiring someone…still a bad notion. You will be paying for demo reinstall etc.
And I’m sure you would actually be open to some kind of liability issues if they were hurt and you had given them the go ahead
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Ethan Griffel
OP
Billings, MT · Member since 2021 · 51 posts · 11 votes
4y
@Joe Splitrock thanks for your response! How do you determine when to do a cost share and do you have tenants ever question that? It seems to me that most tenants are going to expect the landlord to foot the bill for most repairs unless obviously caused by the tenant.
1 Reply
Ethan Griffel
OP
Billings, MT · Member since 2021 · 51 posts · 11 votes
4y
@Jonathan R McLaughlin yes the example in the book says that they just find their own installer, not that they do it themselves. Definitely don't think I'd let them do it themselves! But I still agree, it just seems to me it leaves too much to chance and as a landlord I'm not sure that's control I want to give up on a property?
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Ethan Griffel
OP
Billings, MT · Member since 2021 · 51 posts · 11 votes
4y
@Felicia Lucco agreed! I definitely don't think I'd let the tenant do the repairs/install themselves. I think the author is more talking about letting the tenant go through the process of picking a carpet they like as well as finding a flooring installer to do the installation. I've heard to many stories like yours about letting tenant do their own work!
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
Quote from @Ethan Griffel:

@Joe Splitrock thanks for your response! How do you determine when to do a cost share and do you have tenants ever question that? It seems to me that most tenants are going to expect the landlord to foot the bill for most repairs unless obviously caused by the tenant.

I always pay for repairs. Improvements are different. A repair is when something isn't working. An improvement is when something could be better. That may be newer, cosmetic update or better features.
I will give two examples:
I had a tenant moving in and he asked if I could update the ceiling fans in the bedroom and living room. The fans were working, but cosmetically looked old and they made a little noise. I agreed to cover the cost of installation if he paid for the fans. He ended up doing four fans total. Same tenant called a year later and the dishwasher stopped working. I paid the entire expense.
A tenant may ask for updated flooring, carpet or paint. The existing may be in good condition, but out dated or unattractive. They may ask to have a tree or bushes planted in the yard. It could be kitchen appliances, where they want a larger refrigerator or self cleaning stove. All of these things will add value to the property, but are not necessary updates. I split the cost, because I realize some value, just not the entire value.
Another reason to split costs is to vet out necessary from "nice to have". It also limits requests, because if you agree to requests, they sometimes multiply. Sometimes I ask tenants to split the cost and they say "no thanks". This is still better than just denying requests. You never want to say "no" to a tenant. Give them an option for yes, but put requirements on them. It could be them paying for the improvement, splitting the cost, it could be as part of a lease extension agreement or it could come with added monthly rent. They either say yes and it is win/win or they say no to themselves.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Absolutely not! I wouldn't let tenants touch anything in my house, or have any 'ownership'. As @Bob Okenwa said, if they want ownership they can go buy a house. It's a rental house and more importantly - it belongs to YOU. You need to make all the decisions, especially those that concern looks or functionality. What if they put in an orange carpet that was low quality? And then decide to move out the next month?
This makes zero sense, can't believe this guy is writing books.....
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Luka Milicevic
Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
4y
When I first started out....my very first rental. I had a prospective tenant come in and tell me they wanted to paint one of the rooms a different color. My immediate response was SURE!!! How awesome of you to paint for me on your own dime. Best tenant ever!!!
This tenant never ended up leasing the property as I had someone submit an application sooner than they did.
Looking back now that I'm somewhat wiser I have to say that was the dumbest thing I've ever said. The only responsibility I give my tenants when it comes to repairs is being present to open the door when the handyman/contractor shows up to make repairs. That's it. I control everything else.
I would never allow this practice in any of my rentals.
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Originally posted by @Luka Milicevic:
The only responsibility I give my tenants when it comes to repairs is being present to open the door when the handyman/contractor shows up to make repairs.
Even that is risky sometimes...... :-)

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Dwayne Poster
Investor · Van Isle · Member since 2021 · 455 posts · 226 votes
4y
One of my tenants is a project manager for a large local builder. After we agreed on a price and scope of work for a fence repair, that tenant went above and beyond. I now ask him to bid on any major work I have, from replacing roofs to pouring concrete. He has all the connections, and comes in with excellent pricing. Stroke of luck on my behalf.
1 Reply
R.J. Lange
Kennewick, WA · Member since 2021 · 30 posts · 34 votes
4y
This can only be possible without a professional property management company as it is not advised to allow tenants to complete or choose repairs or remodels.
One issue we have found is an expectation for some compensation if the relationship goes awry.
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Elvis Methoxha
Investor · Hartford / Boston · Member since 2014 · 35 posts · 21 votes
4y
I agree with most of what is said already, tenant needs to abide by the lease and keep things simple and clean, legally and physically. However, this is a question on how YOU want to run YOUR properties.
Personal experience: Rented a 3 Bedroom to 4 people. They told me 2 of the adults would be room mates and I didn't want to ask any further. This apartment has a dining room, however. It didn't occur to me what they would do at all. My tenant decided to turn my dining room into a 4th bedroom! I didn't authorize they putting up a wall and a door but they did it and now I'm stuck on what to do next. The damage is already done and they have already taped and painted the wall.
Questions: Should I bump up the rent to compete with 4 Bedroom units in the area? Should I give them notice to quit? Should I ride this out and give them notice to vacate the lease is completed?
Recommendation: Every situation is unique, because no 2 tenants are the same. You need to decide what route works best for you. However, if you don't want to be sued for unequal housing rights, you have to treat ALL your tenants the same, in person and on legal documents.
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Ethan Griffel
OP
Billings, MT · Member since 2021 · 51 posts · 11 votes
4y
@Joe Splitrock this is great advice and makes total sense! Thanks for taking the time to explain your process to me!
1 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
4y
Originally posted by @Ethan Griffel:
I just started reading 'Landlording in Autopilot' and just read about having great tenants take over cosmetic projects such as replacing carpet. In the book the author states this allows tenant to take ownership in their home and just creates a better relationship between tenant and landlord. He explains he has the tenant find the carpet they want and the installer and then give the bill to the landlord to write the check. I'm just curious if you more experienced landlords have ever tried this and what were the results? I'm on my first house and this concept makes me a little nervous! Thanks!

Take that book and burn it. That advice is total garbage.
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Ford Raptor
Member since 2020 · 2 posts · 0 votes
4y
@Bruce Woodruff chill out dude
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Ford Raptor
Member since 2020 · 2 posts · 0 votes
4y
But yeah i dont even need to read it to know the book is garbage.
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