Would Appreciate Some Advice

Question

I just purchased my first fourplex and have a tenant who I foresee being an issue.

She is currently on a month to month, as her previous lease with the old owner expired. The old lease says the rent was $900. Her security deposit is $900. There are payment receipts of $900. The tenant claims she is and has been paying $800. Market rent is $1,000.

It sounds cut and dry when posted like that. But she also maintains the property in exchange for discounted rent. So I don't technically have to do much on a day-to-day basis.

I am a little apprehensive about calling her bluff and calling her a liar right off the bat. Also, her residence in the place is fairly crucial to the investment.

How do you recommend I handle her?

Thanks.

Account Closed · Answer

Hmmmm.  You want to keep her, but you also want her to pay $900/month.

How about, since she's on a M2M agreement, you give her a written 30 days notice her rent will be $900 in 30 days?  Everybody saves face, no confrontation - but you called her bluff.  She gets away with one month of $800 rent, but no more.

What does she do that's worth $100 rent each month?

Christian Harris · Answer

Hi Wade,

I apologize in advance since I have never been a landlord and cannot speak from experience. However, my two cents would be to ask the previous owner what their experiences with this individual were like. If that somehow isn't an option, I would weight out the pros and cons on a sheet of paper before deciding which approach to take. Consider the value she provides and if that is easily replicable with a different tenant. Another thought to consider is if she is straight face lying to you about the rent she pays then she may do the same when telling you about all the things she "manages" around your property.

Hope this helps somehow!

Atwan Kwan · Answer

@Wade Garrett I think you're giving her WAY more value to your investment than the tenant really is.

I would look at it more objectively and be prepared for the worst.

You just stated that market rate is $1000/mo. and I doubt she's providing $200/mo worth of landscaping. You might be on the easy maintenance road, but you're also forgetting you are losing $200/mo out of your pocket every month just to avoid conflict.

Therefore, finding another tenant should be easy, and being prepared to plan out the lawn maintenance should save money.

What would you be doing with that rightfully earned extra $200/mo?

Mike R. · Answer

I would also,call BS and tell her rent is 900 but she can move out with proper notice.   Another thought is to not renew her lease and get her out asap.  If she is trying to push you around at this early stage, I suspect there will be other problems in the near future.

Michael Noto · Answer

In my experience having a tenant handle any of the landscaping, maintenance, or snow removal duties in exchange for money off the rent will always end up becoming a nightmare for one reason or another.

Karen O. · Answer

If she's willing to stiff you on the rent, she's not likely to take care of your property the way you would like.  go for the increase and get a lawn guy/gal.  If you don't like their efforts, you fire them and move on. Harder and more complicated to do if lawn guy/gal is a tenant paying reduced rent.

Bryan Blankenship · Answer

I would definitely get your own professional maintenance and just have full market rate tenants to offset.

There's no telling what her level of true "maintenance" is that will cost you more in the long run from hidden issues than you'll save via a rent arrangement.And out of principle alone, she will give you issues over this $100 discrepancy and has the power to cause you problems (neglect, bad mouthing to other tenants, etc).

Goodbye to her IMO!

Brian Corbett · Answer

IF market rent is truly $1000/month and she is looking a $100/month discount, then I would approach her with her lease, payment history, etc. and explain that you can and should be getting $1000/month but since she is a good tenant based on her payment history and you both want the tenancy to remain that you will give her a $100 discount to stay in the unit for a total rent cost of $900/month with a newly signed lease.  If she wants to stay month to month the rent will be $1000/month.  It is most likely much more expensive for the tenant to move.

Would Appreciate Some Advice

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