Paying your Tenants to Fix up your Rental!

Paying your Tenants to Fix up your Rental!

Specialist · Grand Rapids. MI · Member since 2019 · 20 posts · 15 votes

Good Morning! I am going to discuss a Duplex I own in the Creston Neighborhood of Grand Rapids, 49505 - Recently rated the HOTTEST ZIP Code in America to buy real estate in! 

I wanted to post about what I am currently doing with my Tenants, and if anyone else has had this Success, if anyone has ran into problems doing things this way, and if anyone has even BETTER ideas for me along these lines. 

I recently bought a Single Family home, and moved out of one Unit of my Duplex that I was living in, and Now have the entire Duplex rented out. The upper unit guy works at ServePro- so he is a pretty hands on handy guy, and the lower unit guy is a younger handyman that is in School. 

I have done some remodeling to both of the units myself prior to moving out of the apartment, I redid the Floors in both units, Partially remodeled the lower level Kitchen, and Added a Slider door to the back Laundry room to the backyard from the main Unit. They were all Added Value - but the projects themselves were sort-of - 80% finished rather than 100%. The Floors were never Trimmed, the Cabinet Hardware and the sides to the counters were never put on, and the paneling and Trim over the Slider door was never put on. So they were all Half finished Projects that I did not have the time or energy to finish (I work full time also, this is just a fun side thing) SO - I struck up a deal with them. Since I realized they were handy - I asked if they would do those things for me, if I could take money off of your Rent for the next month, and we could be even, and I could pay for the materials. So - first it just started out with what needed to be done to make the house look complete - the back wall with the trim, the Kitchen Cabinets, and the Counter sides - I took $150 off of his Rent to do those things for me - THAT IS SO CHEAP considering labor cost these days...(I realize would have been even Cheaper if I did it myself but I did not want too) So - this Idea kind of Snowballed and when the Lower unit got occupied by the younger handyman - I basically said up front "If I wanted things fixed up here and you felt like you could do it, could we make a deal and cut some of your rent for the month?" He was 100% in. So far he has Replaced the ceiling Fan in his Apartment with a way nicer one with much better lighting, Trimmed the Entire Apartment, Fixed the Faucet and the Bathroom Tub Faucet in his Unit (They were not "Broken" just not working Properly and could have created a problem if not taken care of) AND he went and Picked up a new fridge that I bought, moved it into the apartment, and is now handling getting rid of the old fridge! 

So - all of this has been pretty exciting to me - Getting Sent pictures of my Apartment just looking better and better when usually the horror Stories are your Tenants making it Worse and Worse! They are just slowly but surely adding value to my home itself, when I am eventually ready to sell it. And then on top of that - they get to live in a nicer unit themselves, while still paying the same monthly rent. 

So - besides sharing that Idea to others that might have handymen in their units (Obviously it's good for Maintenance of your property, but they always say in real estate the unpredictable cost are where you lose money, so let's say I did not fix that Facet and my Entire lower bathroom Plumbing went to **** and I had to pay heck of a lot more to fix it to a real plumber then just a quick replacing of a faucet that is not working properly) I also wanted to Write this to hear everyone else's two cents on the Idea - what should I be afraid of? how could I make this situation even more of a Win win for myself and my Tenant? 

Thanks for Reading - I hope everyone had an amazing Labor Day Weekend. 

TJ Simmons.

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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
7y

Hey! Congrats! 

I didn’t read the whole thing because TLDR but I would never ask a tenant to do any maintenance on my units even if they’re the best handyman in town. 

It gives them too much control, next thing you know they’re asking for discounts on rent or “hey I fixed my kitchen sink can I be a few days late.” 

No thanks. 

See this reply in the discussion

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    It can work in some cases if you have the right tenant.  More often than not, the work doesn't get done or isn't done properly and results in other problems.

  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    7y

    Hey! Congrats! 

    I didn’t read the whole thing because TLDR but I would never ask a tenant to do any maintenance on my units even if they’re the best handyman in town. 

    It gives them too much control, next thing you know they’re asking for discounts on rent or “hey I fixed my kitchen sink can I be a few days late.” 

    No thanks. 

  • Specialist · Grand Rapids. MI · Member since 2019 · 20 posts · 15 votes
    7y

    Did not read but gave your Two cents! Nice! 

  • Rental Property Investor · Huntsville, AL · Member since 2013 · 419 posts · 323 votes
    7y
    Originally posted by @Luke Carl:

    Hey! Congrats! 

    I didn’t read the whole thing because TLDR but I would never ask a tenant to do any maintenance on my units even if they’re the best handyman in town. 

    It gives them too much control, next thing you know they’re asking for discounts on rent or “hey I fixed my kitchen sink can I be a few days late.” 

    No thanks. 


    Click post, see wall of text(not going to read that), skip to first comment that makes similar point I would make. Agree +1
  • Specialist · Grand Rapids. MI · Member since 2019 · 20 posts · 15 votes
    7y

    Geesh - Maybe a Video would be better than for you people who cannot seem to read a 1 minute read? 

  • Sam L.Pro Member
    Rental Property Investor · Joliet, IL · Member since 2014 · 163 posts · 85 votes
    7y

    Never allow your tenant to do repairs, period. I have high standard and doubt an "average Joe" cares about the fit and finishes as I do when remodeling a unit.

    Furthermore if they get injured... that could be a much bigger headache then a crooked cabinet or sh!tty paint job.

  • CA & NV · Member since 2019 · 215 posts · 378 votes
    7y

    In one word, Never! The risks far outweigh the benefits. The tenants have their best interest at heart, not your interests,

    AND, a video wouldn't help. Way too much backstory. Keep in mind "Saw Sub Sank Same"

  • Investor · United States · Member since 2015 · 415 posts · 487 votes
    7y

    I think it all depends on the tenant. I have had renters do great work on minor things for me, and for a very low cost and hassle. They did a great job because they live there and wanted it to look nice.

    I think you approached it right by having them try a few small items and seeing how those went first. If they keep doing a good job, I would keep rolling with it!

  • Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 936 votes
    7y

    It can work with a handy tenant so long as you can clearly define what success looks like.  It looks like you have tenants with whom that works.  I allowed a tenant to paint their bedroom and it was the worst paint job I've ever seen.  I am going to have to repaint, but also get paint off windows and repaint the trim that wasn't supposed to be touched, but was splattered.  That was an "unskilled" tenant who hired her own "painter."  Fortunately, she is still there and I am not touching it until she moves out.

    Liability is the only major risk I can think of apart from the quality concerns raised by default.  A professional contractor carries insurance your tenants probably don't have.  Have you considered what happens if your tenant is injured installing a ceiling fan (falls off ladder, electrocutes self)?  You could be liable in a lawsuit, especially if the tenant claims no real knowledge - just doing it because the landlord asked me to do so.

  • Contractor · New Orleans, LA · Member since 2018 · 36 posts · 42 votes
    7y

    Definitely some good points made above! There's definitely a level of risk that you're taking on by doing so. I'm very very picky when it comes to doing work so I often avoid letting my tenants touch much. However, I do use a similar system for landscaping. One tenant in particular struggled paying rent on time but was handy. So now I allow him to tend to the yard for money knocked off the rent. He loves it because he gets to make place look better and feel more like home and a cheaper rent. I love it because rents paid on time and the yard is taken care of for $50 a month!

  • Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Tj Simmons Typically, this is a no-no. 

    Yes, some tenants will do a good job, but tenants aren't going to do a great job!

    In your case, you probably have a good tenant; however, for the most part, it is best to avoid this kind of arrangement. 

  • Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    @Tj Simmons

    It appears it has worked out for you a couple times. I’m curious though, did you get an agreement in writing? And, the class of tenant and property can be greatly affected on the quality of work they may do (or not do). I don’t like the idea, but if they were licensed professionals and a contract was written up, it could work.

  • Specialist · Grand Rapids. MI · Member since 2019 · 20 posts · 15 votes
    7y

    @Anthony Wick We did have an Agreement in Writing, it was an Email, it was not a Contract that was Signed by both parties, but basically in writing saying what they agreed to do, and what I agreed to give them in return. 

    I think in the end on a larger scale it would not make sense. Because I have one Single duplex, and I only have two tenants to deal with - its turning out to be not that bad of a situation, because I have vetted my Tenants, I have a relationship with them, and they have respect in me and I have respect in them. Because of that, I think that is why it is working better than some would assume or think. I am lucky for it to be working so well, but I think its because I have taken measures and made things clear and made sure we were very much so on the same page as each other. but I can see in many different ways - where this would be a horrible idea, and that I could easily get Burned, so Thanks everyone for the Comments! 

  • Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    @Tj Simmons

    As a follow up, I imagine the boundaries are very clear on what is to be done, and the tenants are not to do extra work? I could see tenants deciding they want something different and try working that into a discounted rent. Again, big difference on if you have a B class duplex or D class apartments. Glad it’s working out for you.

  • Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
    7y

    Also didn’t bother reading but I can promise ya it’s a hard no.

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

    @Tj Simmons

    I read it. And read everyone’s comments. And it’s a big NO WAY for me also. To much liability. ESPECIALLY electrical and plumbing work. Do yourself a favor and don’t make that mistake again.

  • Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes
    7y

    @Tj Simmons, read it.  Typically I would only encourage that type of a relationship if it's a Lease-to-Own opportunity.

    To your point, it sounds like it could be done cheaper.  You're discounting yourself financially, which is alright if it makes up somewhere else for you, such as stress.  I had a tenant replace floors once, but we were friends by that point and I knew I could completely trust him.  It was a one time only and I made that clear.

    I've also had a contractor ask if he can live in the house while we renovated it.  I said fine but there is no excuse for it to be delayed.  As soon as I thought it was getting behind schedule I would stop allowing it.  It worked alright, he eventually found a place and only slept there the first week or two.

  • Investor · Fort Collins, CO · Member since 2018 · 165 posts · 127 votes
    7y

    @Theresa Harris agreed 8: it’s not up to code you will have problems and risk of issues

  • Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    7y

    @Tj Simmons We are all shaped by our past experiences, real estate or otherwise. This arrangement hasn't blown up in your face yet so ride the wave until it does if it works for you for the reasons you outlined. 

    Only thing I would suggest is having a backup plan for getting maintenance done in case your tenants' quality of work suffers or one day they just decide to not want to do the work anymore. 

  • Rental Property Investor · St. Louis · Member since 2018 · 43 posts · 24 votes
    7y

    Nope. Everybody is a handyman when it's rent time.

    They have painted vinyl window frames, half of a drop ceiling (grid and tiles), 8 feet up to a 12 foot ceiling, bathroom tile.. 

    One tenant does the yard, but payment for that is separate from rent. 

  • Investor · Spokane Valley, WA · Member since 2014 · 175 posts · 94 votes
    7y

    I DID read, but your comments dogging on those that didn't is uncalled for. There is NOTHING in your novel that needs to be read other than you discounted your tenants rent because they're handy and did some repairs for you. I don't know why you felt the need to bash those that took the time to give you their opinions, but that isn't a great way to garner the help that YOU have asked for. 

  • Residential Real Estate Agent · Grand Rapids, MI · Member since 2013 · 803 posts · 689 votes
    7y

    @Tj Simmons This seems to be a decent arrangement for now but I have never had luck with a tenant doing work in my units. The quality they see in a project might not be what you see for that reason I either do everything before the tenant moves in or hire it out and inspect the work. It's ok if they want to fix something here and there small but trimming out an entire unit? I am shocked they moved in with that not being done or you charged too low of rent. Get all of those repairs done ahead of time and then charge higher rent. BTW I own two duplexes in the same neighborhood, great spot and rents are getting up there. 

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