Tenant to Perform Repairs in exchange for rent reduction

Member since 2018 · 13 posts · 8 votes

I have a person who sometimes work as my handyman for my rental property. He's been and reliable so far. He is now interested in occupying one of my apartments which has become available for rent. He's agreed to perform all repairs (within his scope of work) and maintenance for my property in exchange for rent reduction. I'm not quite sure how this handled or what the reduction of rent would be. Has anyone else ever dealt with this type of situation? Is this an contractual agreement or addendum to lease agreement? Any advice would be appreciated. Thank you.

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Marc Winter

Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes

@Aaron K. is right. Just say 'no'.

If you have a tenant that falls behind, that's one problem. If you have a handyman that doesn't work out, that's another problem. Why complicate your life by combining those into more problems?

Make it a policy not to rent to relatives, friends, workers or employees. And don't hire existing tenants to work for you.

Ask me how I know about this!?!

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Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
I wouldn't do that, if you pay per occurrence you incentivize him to break things. If you reduce rent every month you probably won't come out ahead in the long run.
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Marc Winter
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
6y
@Aaron K. is right. Just say 'no'.
If you have a tenant that falls behind, that's one problem. If you have a handyman that doesn't work out, that's another problem. Why complicate your life by combining those into more problems?
Make it a policy not to rent to relatives, friends, workers or employees. And don't hire existing tenants to work for you.
Ask me how I know about this!?!
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Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Marc Winter how do you know about this? :)
I'm ready for story-time.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
6y
No. No. and No.
Do not mix businesses. Repairing and maintaining your units is one part of your business. Renting out your property is another part of your business. If you want to use this guy to do your maintenance & repairs (not recommended), then draw up a separate contract/scope of work agreement in which you will pay him independent of the rent, and have him pay whatever your market price is for the unit. The net effect to him would still be the same, but if his work sucks, he is difficult, you want to raise the rent, or want the unit back, one won't have any effect on the other.
If you go this route anyway you are asking for trouble and I would bet money that within 1-2 years you will be back on this forum asking how to handle a tenant/employee instead of just a tenant or just an employee.
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Regina Bailey
OP
Member since 2018 · 13 posts · 8 votes
6y
Thanks for all your replies. Sounds like this is NOT a good idea for your handyman to occupy one of your rentals in exchange for reduction of rent.
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Nat C.
Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
6y
Originally posted by @JD Martin:
No. No. and No.

Exactly what JD Martin said! Sign a regular lease with this tenant at the full rent amount. It is not advisable to then hire him for work but if you make that decision, have that as totally separate financials and paperwork from your rent.
You will have little recourse if you give him reduced rent and he doesn't do the work. I have done this before to try to help people who couldn't afford to pay the rent and they simply never did the yardwork or whatever they were supposed to do. They have already received what they want (low-cost housing), so there is little motivation to do the work. It's basically the same as paying someone before they have done work and then hoping they will do it.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
6y
Keep the two separate. If he's your regular handyman already, keep paying him for the work that you need done on your other units and he can pay market rent.
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Pat L.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
6y
I had one we inherited who did maintain the building & I needed him until I got familiar with the idiosyncrasies of a run down 6500 sq ft conglomeration of 6 apartments added over 30 years & a myriad of wiring, hydronic heating & plumbing that seemed to go no-where. Having got the original owners daughter pregnant he had been there living free for 24 years!!
I had him start paying <mkt rent then evicted him when his work became shoddy & he was disrespectful to our daughter. I took in another guy who did an amazing job on the attic apartment rehab that hadn't been touched in 25 years. He now works on various property maintenance jobs but pays full rent & we pay him $10/hr for any work assigned beyond landscaping & trash removal that he just does. Once he completed the rehab of his attic apartment we raised his rent $100/month.
Now I have another guy, also living in at the same building, who had worked for me for many years. He pays the designated rent but I pay him $12/hr for any work assigned. Having built homes in his younger Lic Contractor days he has done & continues to do some great work updating our buildings for street appeal & Insurance requirements.
Yesterday he opened our own pool & replaced several cracking roof vent pipe boots on our home & my wife had him do several other other tedious honey-do jobs. He just wanted $60 for the day. Our pool opening guy of 20 years charges $248+tax for a 1/2 azzed job. A month ago he completely stripped & replaced the old leaking roofing tile (damn sky-lights) over our 15x20 hot tub room for $180.
If you find & keep a good handyman they're like gold, my wife says I seem to adopt them.
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George W.
Investor · NJ · Member since 2018 · 869 posts · 921 votes
6y
I'd say overall it's a bad idea. Ive seen it play out poorly over the years being a plumber working in numerous buildings across the state. Sometimes it works but not all the time. Also usually the buildings I see with "on site maintenance staff" are usually the biggest SH@# holes because one guy cant do it all and they end up getting way in over their head. I've been to many apartment complexes where the handyman did more damage to the plumbing & heating system then good.
Generally the handyman who rents off a landlord type arent the kind of people who do good work for starters and most low end handyman arent ideal tennats. Most of the handyman I see at apartment complexes are washed up, drunks or druggies. If someone was a good handyman then they wouldnt be working for only $10-12/hr or for a free/discounted apartment.
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Billy Smith
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
6y
Seen enough to know that it is a gamble at best .They claim they can paint what have you the work looks like Sh...
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