Having tenants 'manage' upgrades/repairs
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!
@Ethan Griffel My A class tenants manage minor repairs and one of them even painted my house ( it needed it) for cost of materials alone. I live abroad and dont have a PM so that is the easiest for me. They always get pre.approval unless its an emergency. Works if you are remote like I am with a big time difference.
If you
Dont give up the reigns a little then your investment will be less passive. Most renters know the bounds of reality expenditure.
I will check out that book
@Ethan Griffel
I’m seeing a lot of “don’t do this” responses. The truth is- it depends on your situation.
I have a tenant at a duplex I’ve owned and self managed since 2014 and she’s lived there since 2016. After 3 years of steady renting and no issues she asked to upgrade the kitchen to include a dishwasher. We worked out an arrangement where she and I split the cost and she has stayed there since (3 more years of steady rent). I got a nicer property and she got a nicer kitchen and we worked it out amicably.
It is not a black and white “yes” or “no” answer. It worked for me- I’m sure it has been a disaster for others.
The conditions for me would be the following: the tenant should have been with you already for at least 2 years (with no issues and should sign up for another 2 year lease.
@Christian Beyer that's a great point I forgot to mention from the book. The author recommends making and addendum to the lease for and extended period if you allow the tenant to do this. Thanks for the input!
100% NO-- this is a horrible idea!
With the carpet idea, here is how it'd go. They'd pick out some really nice, plush, $4-6/sq ft carpet, hire the first person they can find, will likely charge $2-4/sq ft, send you an enormous bill. They technically did everything for you, right? Instead, you would have picked the $1/carpet, and get it installed for $1.50? Ohhh--- here's the flip side, they hire their buddy to do the labor, and the guy injures himself because he doesn't know what he's doing, and then sues you-- the landlord! Aren't you glad you let the tenant pick the people?!
Huge difference.... I had a friend who refused to fix a toilet, since there was another working toilet, well-- the tenant hired a big company to come fix it for $300. The friend got mad because she would have just replaced it for $90/toilet. Scale this times multiple properties, and whew-- what a crapshoot! Absolutely NOT!
Once in while it will turn out ok ,the odds are against you turning out well so many ways it can go wrong .
@Ethan Griffel
I think you can do this but definitely not as the book describes it.
I might be able to tell them pick out any color from this product line, or give them 3-4 options but letting them choose is how you get lime green paint and purple carpet and just create more expenses long term having to replace it in a few years when they move.
I do have some long term tenants I'd let pick from some options, but not go pick out their own stuff completely.
I agree with all of the responses- hard pass on this idea. You are the landlord, not the bank. A major sticking point for me is the tenant finding the contractor. I only like those I have vetted in the rentals- for a number of reasons. If the tenant selects a fly by night company or a "friend" who does a crap job- you are now left paying twice to fox their shoddy work. I currently have tenants I love; if flooring was being replaced while they were in there, I would potentially select a few in my budget and get their opinion (opinion only, I may still pick what is best for the rental) to give them a voice, but it would be clear I am making the final decision. At the end of the day they will leave, and you are left with a product that needs to be durable, look good, and be neutral enough to go with a new tenant's taste. This is a business with small margins, and blowing a budget (not to mention while they are there and using the material- so not new for next tenant) can lead to financial issues.
Well everyone already beat me to it with the obvious answer but I will use one of my placers as an example.
I had tenants that wanted to make some alterations to the place which I did not mind as it would improve the place but informed them that I would need to approve of their plans and this would com out of their pockets.
The made alterations which if I'm being honest made the place look much nicer but then tried to get out of paying rent because of the alterations they had made. They informed me that they would only pay rent if I refunded their security deposit immediately. Fast forward to sending them 3 day writ on possession and and a court judgment that they are not entitled to their security deposit because it was an alteration and not a repair and I am now losing my tenants who up up to that point had been decent tenants. Now I must make the place rent ready and deal with lost income during that time.
In my opinion the only way this Landholding on Autopilot might work is having a very detailed, signed, official document where the landlord specific guidelines in terms of cost alterations/repairs that would need to be first reviewed by a lawyer prior to having the tenant sign and even then I think that there is a 83% chance that this situation will blow up in one's face.
@Ethan Griffel
Here’s what I expect from my tenants:
Pay rent in time
Keep the house nice
Shovel/mow as needed
Replace light bulbs and smoke det batteries.
That’s it.
Anything else they know to call me. I don’t want them doing anything repair-wise.
Do NOT let tenant do any upgrades/repairs EVER!! Check out TaskRabbit if you are on a budget & always hire a PRO!
-
Real Estate Agent Ohio (#2023000937)
- 4402637501
- http://georgemastrosavas.howardhanna.com
@George Mastrosavas "Always hire a pro" Nothing says pro more than taskrabbit.
@Ethan Griffel
Sounds like a winning situation for the right tenant and landlord. Not sure how much time or trouble it would save me.
I might do this if I was unable to be present.
With phones having such good picture quality, as long as I approve things by picture or voice chat, I would entertain such a thing.
Need warranty protection for sure, and at some point I would be checking in person for quality of material and workmanship.
Be sure you are OK with the color and style of carpet. If your tenant needs to leave, and the carpet is purple and yellow, it will take a special tenant to perhaps enjoy such nice carpet!
On the face of the idea it seems OK to me!
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
- 3,647
- Votes |
- 7,047
- Posts
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
@Ethan Griffel Don't think anyone touched on the potential legal liability of letting tenants do maintenance.
If they get hurt in the act, they will find a free attorney to file Personal Injury lawsuit against you - proving no good deed goes unpunished:(
