Which is better? Pay or charge less rent?

Question

I am wondering which is a better option.  Is it better to pay a tenant to take care of certain things around a duplex or should I charge the tenant less rent?  I am wondering from a tax advantage point of view. If I charge less, I am bringing in less income.  If I pay them, I am looking at them as an expense for my business.  So, which direction is better and why?

Greg R. · Answer

Neither. You take care of the problem yourself. Get a good handyman and when problems arise call the handyman and have him take care of it and pay him directly. Very foolish to expect tenants to be honest if they are claiming that repairs need to be made and then you take money off their rent or pay them. Trust me, those are both very bad ways to go about repairs.

Theresa Harris · Answer

I agree with Greg.  It depends on what you are talking about. If it is shoveling the snow on sidewalks or driveways or cutting the grass at a single family home or their half of the dupelx-those are things the tenants should be doing when they rent the house-no decrease in rent, no extra pay.

Patricia Steiner · Answer

Neither.  Neither.  Neither.  Save yourself and leave your tenants to be tenants and your trades to be trades.  And, never discount or drop rent.  That's a sin in the world of real estate.  The rent is the rent - so always write a check for any expense or job and make no excuses for anyone to ever think paying anything less than the full rent on time is okay.

Kim Meredith Hampton · Answer

I almost never let tenants go work on the property, most are not licensed and/or insured. If they are mowing their lawn or fixing things they damage, sure ho ahead, you should be taking care of those things anyway. You should always use a licensed and insured handyman/repair person for almost everything you do on the property. Make sure to keep a log of what, when, where etc…

Chris U. · Answer

Someone more experienced may have a better idea about tax implications. My gut reaction from an optics standpoint is that if it were me, I'd rather pay them separately.If that tenant's duties change (whether increase or decrease) it would seem a hassle to fluctuate your rent accordingly. I'd rather keep the income math all the same, let the expenses be the variable component.It may be semantics, but lessening the rent to me could also cheapen the value of the rental in the eyes of your tenant. And also pushback if/when you need to return rent to the initial amount (or more). Even though from a numbers standpoint it's all the same.Now if there's a tax advantage either way, maybe that all goes out the window haha.

Basit Siddiqi · Answer

From a tax standpoint it will be the same.

Conner Olsen · Answer

I have heard it's better to pay them to make sure the work gets done.

Eliott Elias · Answer

It’s probably better to pay them from a tax standpoint, but the chances of them getting the work done themselves is a lot slimmer than you maintaining your home

JD Martin · Answer

Neither is better. They're both bad ideas. Your rent rolls and your repair rolls should be separate items, ideally done by separate people. I have used a professional tenant before to do work - I have a plumber in one of my rentals, and I will throw him some side work on occasion on other properties - but he bills me out like any other professional would and I pay him separately. No quid pro quo on rent. And generally it's a bad idea to have tenants doing anything, as if it goes wrong now you have a professional problem and a tenant problem.

Which is better? Pay or charge less rent?

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