Reducing Rent Every Month If No Maintenance Calls

General Landlording & Rental Properties
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Reducing Rent Every Month If No Maintenance Calls

Emmett O.
Rental Property Investor · Philadelphia, PA · Member since 2017 · 24 posts · 7 votes

Hi Everyone,

In a lot of the books I am reading, as well as some of the podcasts I have listened to, many landlords have talked about adding a clause to their leases to give anywhere from $25 to $100 a month back to the tenant if they handle maintenance issues themselves. 

Has anyone had success in doing this? Are there any nuances to this approach? What does the legalise look like in your leases? 

-Emmett

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Patrick M.
Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
7y

I cannot imagine hating my assets so much that I would allow a tenant to hire some idiot off the street to destroy them.

And then reward the destruction of my property by devaluing it through rent reduction.

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  • Patrick M.
    Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    7y

    I cannot imagine hating my assets so much that I would allow a tenant to hire some idiot off the street to destroy them.

    And then reward the destruction of my property by devaluing it through rent reduction.

    29Reply
  • Veronica Martin
    Real Estate Broker · San Marcos, CA · Member since 2012 · 6 posts · 5 votes
    7y

    I agree with Patrick,it’s best for landlords not to let tenants do major repairs. Garbage disposal,lights bulbs and filter replacements I think a tenant should do but should be noted on the lease agreement.

    1Reply
  • Keith A.
    Rental Property Investor · TX · Member since 2019 · 236 posts · 392 votes
    7y

    and wind up with them calling plumbers for every clogged toilet or dripping faucet? no way. I tell them to buy drano, and I'll save the $$ by fixing a dripping faucet myself. It also gives me the opportunity to be in the property making sure they aren't destroying it.  No matter the situation, you give some tenants an inch, and you will pay dearly for it. 

    3Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    And some tenants will not fix a thing and let the mice over run the place with their roach friends and enjoy a shower under every sink and a bath where the roof leaks.

    Nope I want them to call when there is a problem before there is a BIG problem.

    2Reply
  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    7y

    Those landlords need to ask themselves why are there so many maintenance calls.

    The thought of giving tenants a financial incentive not to contact me when there is an issue is just mind-blowing! I can just imagine a tenant waiting a week to call the landlord to report a problem so the month can end and they can get a $25 credit. Meanwhile, that extra week caused a few thousand more in damages.

    I encourage all my tenants to contact me with any issues. I make it clear that they are not bothering me and I honestly want to know if there is an issue. 

    4Reply
  • Katie Stewart
    Specialist · Fort Collins, CO · Member since 2018 · 557 posts · 191 votes
    7y

    I would definitely pass on this idea. Only allow tenants to do very minor repairs themselves. As the others have said, it could cost you way more money if they mess up the repairs.

    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    This idea is Crackhead dumb - no way

    9Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    7y
    Originally posted by @Emmett O.:

    Hi Everyone,

    In a lot of the books I am reading, as well as some of the podcasts I have listened to, many landlords have talked about adding a clause to their leases to give anywhere from $25 to $100 a month back to the tenant if they handle maintenance issues themselves. 

    Has anyone had success in doing this? Are there any nuances to this approach? What does the legalise look like in your leases? 

    -Emmett

     You should not & typically cannot legally pass the repairs off onto your tenant. As a landlord you should be & really want to be in charge of that stuff. You need to make sure the only people in the properties doing work are vendors whom you have approved & who's work you know will be sufficient. Major thumbs down to these books that say otherwise.

    0Reply
  • Mike Clark
    North Houston (Spring Cypress, Tomball areas) · Member since 2018 · 6 posts · 4 votes
    7y

    Emmett;

    Sorry, but I have to agree with the other BiggerPockets members who posted here.  I don't want to give the tenant any reason at all to allow a potential small problem to go unaddressed with the possibility of it becoming a big problem.

    Now, if your goal is to minimize the headaches of having to go out to the rental property everytime the tenant thinks that there is a problem, then ask the tenant to send you a video or picture of the problem using their Smart Phone (which it seems EVERYONE has these days).  This will allow you to get 'eyes' on the issue and then you can make the determination of how to proceed without making a special trip to the rental.

    Just food for thought...

    Mike C.

    4Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Sounds like the perfect approach for those arm chair investors that think real estate is a passive investment. The very type we like to take advantage of when they are forced to sell.

    5Reply
  • Connie Chan
    Investor · Member since 2017 · 239 posts · 149 votes
    7y
    @Emmett Ogiony I agree with all the other posters here. The downsides for this approach are not worth it. Life is all about creating the right incentives for the behavior you want. You don’t want your tenant to fix things themselves. You don’t want your tenant to not tell you about something that really should be fixed. You definitely don’t want the tenant to wait a few days before telling you about a problem just because it’s almost the end of the month. All of these create more liability and costly repairs for you down the line. My mom once had tenants that complained about all kinds of small problems. But they turned out to take care of the home the best out of anyone. They cared for it like their own home and kept it in pristine condition.
    1Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    @Emmett O.

    As @Thomas S. put it, that's exactly how you get crucified on a wall of your rental at some point. There are at least a dozen investors highly active in this forum with personal experience of taking a property off someone who followed this or a similar strategy until they got unlucky. I'm another one of them.

    What I see a lot of now in my target area are properties which used to be owned and maintained by pretty good working-class handymen homeowners and their circle of acquaintances. Again in this area, these are typically well-built brick-veneer single-family homes that are between 50-100 years old. The handymen owners bought them as primary residences in the 1960s and raised families in them. The kids all went to college for sensible degrees and were told repeatedly that they were too good to work with their hands, to go make something of themselves. This was also part of why they chose to leave western Pennsylvania and go places where the job markets were better in their fields, leaving the parents behind in the family home.

    Sooner or later, the house ends up empty and in the hands of the far-off kids, who with depressing frequency get the bright idea to run it as a rental. They put up an ad on Craigslist, get a tenant, and BS their way through long-distance landlording for a few years. A few years is usually all it takes to run what ought to be a moneymaking asset hard into the ground, with the assistance of unreliable, unscreened tenants and practices such as the one you're describing.

    Especially in an older property, you as the owner absolutely have to stay on top of what's happening in your asset. What should be a $50 fix if caught early can often require an additional figure or two to fix if enough time passes. There are plenty of low-mental-horsepower tenants out there who will try to take care of every $50 problem using some unimaginably ignorant $1 rigging trick because they think their long-dormant handyman capabilities have only been waiting for a great golden opportunity to shine.

    I really hope you're not waiting for the one person on this thread with no experience who's going to tell you this is a great idea before you go for it. Sooner or later, that one person always shows up.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    @Jim K.  bottom line is landlording is anything but a passive pursuit.. so that book is just trying to play into that thought process of yes you too can leave your job and do nothing but just collect checks.. and here is how you do it. LOL

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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    3Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    This reminds me of an incident I had the other day. I was walking through the common area of a triplex I recently acquired .one if the tenants was walking in behind me . The prior landlord was known for taking shortcuts and I marveled at the paint job on the walls. It was very poorly slathered on the wall and all over a handrail . Really bad ! I said out loud to the tenant “ wow it looks like Stevie wonder painted this interior at night with sunglasses on !” The tenant was immediately offended and said “ hey I painted this hallway ! Our old landlord gave me a reduction in rent to paint it !” That’s when I was reminded why I pay qualified help to do a job

    7Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    @Dennis M.

    Good luck retraining that guy.

    1Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y
    Originally posted by @Jay Hinrichs:

    @Jim K.  bottom line is landlording is anything but a passive pursuit.. so that book is just trying to play into that thought process of yes you too can leave your job and do nothing but just collect checks.. and here is how you do it. LOL

    Just mortgage the half-million dollar West Coast home you spent 20 years paying off to buy ghetto SFR across the country sight unseen! What could possibly go wrong?

    4Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jim K.:
    Originally posted by @Jay Hinrichs:

    @Jim K.  bottom line is landlording is anything but a passive pursuit.. so that book is just trying to play into that thought process of yes you too can leave your job and do nothing but just collect checks.. and here is how you do it. LOL

    Just mortgage the half-million dollar West Coast home you spent 20 years paying off to buy ghetto SFR across the country sight unseen! What could possibly go wrong?

    now that made me chuckle.  do you recall the LA investor who made a post exactly like that.. bought admittedly D class rentals in the mid west.. and was going to make 5k a month or something based on proforma..  he got 100 votes.  so many people who don't know what they don't know thought he was genius..

    I did a counter point post and I got a 100 votes.  exactly what you said..  I could not believe how reckless that was.  and of course you hear nothing from them ever again.. you simply cant manage D class without an iron fist.. and the ability to be on site to deal  

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jim K.:

    @Dennis M.

    Good luck retraining that guy.

     I always say the painter must have come down with parkinsons.. although I know that's not kind..  but you know painting the windows shut other dumb @$$ stuff they do.. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y
    Originally posted by @Jay Hinrichs:

    @Jim K.  bottom line is landlording is anything but a passive pursuit.. so that book is just trying to play into that thought process of yes you too can leave your job and do nothing but just collect checks.. and here is how you do it. LOL

    Yep you just need enough turnkey homes  in Indy  to hit your”  freedom number” quit that burdensome job ,tell that evil oppressive employer to kiss your grits ..sit back with a cigar and collect those rent checks as they come flying in like the swallows of capestrono  !!! Being Your tenants will be doctors and nurses you’ll never have any calls or requests . You’ll be sipping mai tais on a sunny beach with Robert kiyosaki in no time 

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Dennis M.:
    Originally posted by @Jay Hinrichs:

    @Jim K.  bottom line is landlording is anything but a passive pursuit.. so that book is just trying to play into that thought process of yes you too can leave your job and do nothing but just collect checks.. and here is how you do it. LOL

    Yep you just need enough turnkey homes  in Indy  to hit your”  freedom number” quit that burdensome job ,tell that evil oppressive employer to kiss your grits ..sit back with a cigar and collect those rent checks as they come flying in like the swallows of capestrono  !!! Being Your tenants will be doctors and nurses you’ll never have any calls or requests . You’ll be sipping mai tais on a sunny beach with Robert kiyosaki in no time 

    or Spending the summer in France like Mr. and Mrs. Morris did ?    

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    @Jay Hinrichs

    I remember that post very well. I worked hard to say nothing on it. The accolades just kept coming and my jaw fell further and further as I wondered how deep the crazy went in BiggerPockets.

    2Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    7y

    @Emmett Ogiony

    I just evicted a "contractor" from an SFR I own. Omg the things he did to my house...

    I would never allow a tenant, or reward them, to do anything other than plunge the toilet when they clog it. Half of them won’t respond to a text message or bring their garbage cans in, and you’d let them replace a faucet or paint a ceiling (and get paint everywhere!)

    4Reply
  • Alan D.
    Rental Property Investor · Columbus, MS · Member since 2018 · 10 posts · 4 votes
    7y

    Bad idea

    0Reply
  • Maugno M.
    Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
    7y

    @Jim K.

    @Jay Hinrichs

    LOL you guys crack me up. I saw that post too, and I thought oh boy. I started landlording late 2017 and have been running around like crazy. I cant imagine rentals being out of state ! Its hard enough as it is for me with my rentals all being down the street. WTH. I am very hands-on and learning as I go. And I have D-class C class rentals if that's what you want to call them. I bought a big tract of land, about 10 acres, and have steady been putting mobile homes on it. I'm at 4 now, which give me GREAT cash flow. Of course, I don't pay much for them, but I also look for deals. Nothing ugly, and I try to buy them ready to rent and newer than 1990's. Biggest expense is septics. And ive been lucky my dad helps me out a lot with since he's been in construction his whole life. No permits needed in the country. 
    But point being, landlording gets tough and dirty. Huge asset for lower class rentals is tough, itll take forever to get your money back. 

    3Reply
  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    7y

    I'll usually deduct material expenses like paint and mini blinds and whatever else from the rent with receipt just as a nicety. Anything else I look at case by case after the work is complete and may negotiate an additional credit if something was actually fixed or improved significantly.

    0Reply
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