Interior Decorator · Orlando, FL · Member since 2018 · 16 posts · 13 votes
I am renting a house to a tenant that keeps making improvements to the house. He put in a backsplash in the kitchen, put up larger fence doors, light fixtures and fans, etc. I keep telling him to stop and he says dont worry about it, you wont owe us anything, we just love the house. I did pay for new flooring in the house and he put it in himself which I am paying him by taking money off rent $350 for 5 months. Now he wants to replace the shed. I finally told him to stop doing it and that no, he cannot do that. He got all huffy and puffy and said that he may just go buy a house etc, he said we dont owe him anything but then contradicted himself and said: " do you know how much money I spent here"? I was planning on renewing the lease, which is 3 months away. What should I do? Any specific language that I can include in the new lease? These improvements need to stop. Thank you
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
This is probably bad advise but here’s my opinion ..if he’s a good tenant otherwise and pays his rent and he’s doing tasteful improvements that Add value and maintains his repairs why would you want to drive off such a tenant . I’d allow him under one condition .. he signs a document stating he is doing this all on his own free will and expense knowing he won’t get any money or credit from the work he performs now or in the future and the work must be pre approved by you first . You got a good thing potentially if you play your cards right imho
Catskill, NY · Member since 2018 · 636 posts · 668 votes
8y
One of my tenants likes doing small improvements as well (bathroom vanity, flooring, landscaping etc.). I’m ok with it. It increases value and makes them more likely to stay since they are more “invested” in the property. They could buy a house, but they really like where they are and don’t have the responsibility and stress if something serious goes wrong.
In the OP’s case, the fact that the guy can be a hot head is more concerning to me than him making improvements.
I dont see anything wrong with a tenant making " improvements " to add value to your property. I would however make sure you approve the work and its being done by a licensed contractor ( who can warranty the work) and they sign a "lien waiver". You don't want them to call you to court stating they've invested in your property and you refuse to pay them for their work.
PS: If someone is willing to invest in your property it means they don't want to leave therefore a low vacancy risk to kill your cashflow. If they are good tenants I see no issues.
Yes I understand, I'm saying if it's a good tenant instead of kicking them out (Probably 1-2 months Vacancy) he probably should outline his rules on what's acceptable.
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
8y
When My mother had lost her home, my father took over the mortgage. He had no experience as a landlord, and is pretty easy going.
He allowed his friends to rent out the house and do work in exchange for discounted rent. Well they got discounted rent, and did crappy work. But when the work wore off, the rent stayed the same and they were unwilling to pay full rent.
He then rented the house out to a couple. Again, he allowed the husband to make improvements to the house in exchange for discounted rent, with the option to buy later down the road. Well this guy went overboard and basically gutted the place.
Moral of the story: 4 ruined relationships. He ended up paying close to 4 years worth of the mortgage himself. And he ended up selling the house 9 years later for the same price he could have received if he had just sold it the day he took it over.
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
8y
Looks like you've learned a valuable lesson, so there is a positive outcome. Most people are always looking for reciprocation, especially when it involves time and money. He might say he doesn't want anything from you now, but he has ammo if you ever wanted him to leave on short notice.
San Antonio TX · Member since 2014 · 32 posts · 3 votes
8y
My mom has a somewhat similar tenant in her 4 plex in California. He's undocumented and has lived there for 18 years. The best tenant ever. This guy has consistently paid his rent on the 1st of every month in cash for 18 years. Even when the 1st is on Sunday. He takes care of the property like he owns it. We have watched his babies grow and graduate high school. So this would probably be a bad advise; but if the tenant is honest and good, I will let him stay. Sometimes the rules need to be adjusted to work for us
Real Estate Investor · Irvine, CA · Member since 2013 · 24 posts · 24 votes
8y
As many have stated before, there’s no right or wrong answer for this. It comes down to where you reside on the risk reward continuum.
I’ve worked hard to get where I’m at so limiting risk and liability is just as important as increasing profit. Personally I’m not willing to risk a potential lawsuit or even worse, a fire, all because I wanted to profit from my tenants $100 (potentially) poorly self-installed light fixture.
Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes
8y
Here's my experience with these things:
We had a tenant flood a house trying to install a water heater pressure relief drain line. He ruined over half of the new wood laminate in the home. After that mess, he was embarrassed and was afraid that the owner was going to charge him for the damages so he quit paying rent and moved out the next month.
We had another tenant who did not notify us of an A/C issue. He invited his friend over to take a look at it as his friend was HVAC certified. Unfortunately, the friend did not fix the A/C properly, but he was able to invalidate the warranty from the original installer.
Also, while I haven't experienced this myself, I have read cases where judges have claimed that tenants have equitable interest in a property that they updated. If you're going to have to pay them for the work that they did, I hope they did a good job.
Personally, I don't like to allow tenants to do these kinds of things. One of the advantages of renting is not having to deal with repairs and upgrades.
I would consider asking those tenants if they would like to purchase the home. Finance the house if necessary. Then they are responsible for upgrades, repairs, taxes, and insurance.
Brookfield, WI · Member since 2016 · 191 posts · 108 votes
8y
How about:
-Offer to sell him the house/lease option it to him, possible at a favorable price (to you, since he seems to love this house)
-Get something in writing that allows him to continue his "hobby", but allows you to approve work actions AND clearly states you will not be reimbursing him or paying him in any circumstance for improves he does decide to implement on his own. You can always make specific instances of payment for specific work products, again, each one should be in writing. And make him pull permits where required, or at least use that to throttle work. "I checked, that requires a permit and inspections, if you really want to do it, you'll need to follow that process...." For example, my city actually requires a permit for a shed (and a bleeping concrete pad...)
Personally, I would try to work out the last option, he's a good tenant, is improving the property, not trashing it, and if you can get both control of work scope approvals, and free improvements, it could be a win-win.
Rental Property Investor · Atlanta, GA · Member since 2014 · 36 posts · 1 vote
8y
First, as long as it is a good tenant paying rent and maintaining the property in good condition, there is no reason to let him go.
Second, if the tenant can do good improvement with his money and labor, why would you stop it? I guess the only concern is you are afraid of paying the improvement cost, getting undesired or unqualified "improvement", losing the ability to increase rent, etc. If that is the case, you can simply state it clear in the lease. When you renew the lease, you can be frank and say it in the lease the improvement needs to be approved by the landlord and conducted by professionals, the tenant will be responsible for the cost, etc.
For example, even a new paint paid by the tenant will need an approval from the landlord.
Interior Decorator · Orlando, FL · Member since 2018 · 16 posts · 13 votes
8y
Thanks for all the feedback. I dont have plans to sell this house. If all goes well I would like to hold on to it for a really long time. He loves it and wants to make it his for the same reasons I bought it and rented it. Its in a very good location and school district. I dont plan on letting him go as long as the situation does not get worse.