Rent discount for tenant acting as on-site super / PM
I've got a quad under contract. All units are currently leased. One of the tenants is the seller's daughter, and she was given a rental rate $100 less than market to "keep an eye on the place." I've met her, and her father (the seller), and she has been mowing, trimming bushes, letting locked out tenants in, accepting rental applications, receiving tenant maintenance requests, and showing units.
Her day job is basically the same - she leases units for a local real estate firm that owns similar product to the one I have under contract.
I've been going through the pros and cons of continuing this arrangement. The first issue is her rent. Rents have gone up, and she is now $195 under market. If this arrangement continues, I think some rent increase is warranted. I would also want a more formal written agreement that states what she can and can't do, and allows for the arrangement to end by either party and the rent re-sets to market. In her prior arrangement, she was working for her father. I don't want to hire her as an employee, but it seems like a fine line here, especially if we have a written agreement regarding job duties.
My other thought, given it is more of an employee / employer relationship vs the family relationship she had before, is to charge market rent and pay her X amount to do the job. But then I'm into hiring an employee, taxes, etc. My gut is telling me that is the way I will need to go if she keeps doing this work.
Obviously, I can just raise the rent and do everything myself, which is fine. I'm just looking for a way to keep a good tenant that provides value to the property.
I think I'm leaning towards telling her the rent is going up, and I'm not interested in hiring a property manager right now.
Anyone else had a similar experience? Anything I haven't thought of? Thanks,
Brad