I have a sfh that I rent. The tenant that I have in the house wants to pay for mutually agreed upon repairs and deduct the cost from the rent. While the net income ends up the same it seems like it could cause some unforeseen issues.
What do you all think?
Never allow tenants to do any repair or other work on your property. Most have zero skills those that do start but never finish, over charge, do work unauthorised, create liability issues etc. Landlord is always on short end.
If there is work to be done and you do not want to do it yourself hire and pay a contractor.
The bigger question is why are you not doing the work yourself?
Your property, you should Be in control.
To your success!
Agree with above....unless the tenant is some highly skilled craftsmen that you trust....., NEVER authorize the tenant to do work on your property...EVER.
Even if you did...and I wouldn't......I would have them pay you rent and then separately pay for the work
But don't do it......
I never, ever allow a tenant to fix things. They simply can't do it the way it should be done. And the liability that comes with it is fully on you....good luck!
I have a long-time tenant that takes care of the grounds for me, for which I pay for materials and a monthly credit for the labor. This has worked out well for me BUT it took time to develop the level of trust for this. I observed the level of care he takes for the house and his own possessions before making this arrangement, and haven't had any problems. That being said, I would never have any tenant take care of anything more involved due to the liability. For example, if you "hire" your tenant to fix something that requires them to use a ladder, and they then fall off & injure themselves, you can be held liable (yes, stupid, but true).
Thanks for the feedback everyone. Just to clarify, the work is being conducted by a contractor not the tenant themselves. It’s work that I’m authorizing, but I definitely agree it sets a bad precedence. It also creates a situation where the contractor is working for the tenant and not me so there could be a conflict of interest. I appreciate your comments. Moving forward I’ll pay the contractor directly.
@Steve Fitzgerald this seems like you are losing big time on this deal. He owes you rent and agreed to pay for half the repair. They are separate. Get the rent, then get more for the repair. If you take less rent to pay for the repair, they are only paying a total of rent, and you're paying the total cost of the repair.
Yes, definitely pay the contractor directly yourself, after-all he works for you! The tenant will tell the contractor to do all sorts of things that you didn't expect ("hey, while you're here, would you mind fixing this too"), and then you'll get stuck with the bill. At the same time, ask your tenant to send you pictures of the work, as an additional verification that the contractor did a good job.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing