Renting a unit to your property manager

[Greg W.]

Hi, I work with a property management company at one of my buildings (a 7 unit) at 9% of rents. One of the units was destroyed by a tenant and need about $7,000 of rehab. 

The property manager offered to do rehab in exchange of rented out the unit as her office for free or cheap for a year or two. 

Would you do this? Would this effect the property value by decreasing the income I could have had for this unit or could rehab be considered a years rent for tax and property value purposes? 

Thank you, 

Greg

[Jeffrey Holst]

I might do it but it would reduce the value if you plan to sell it soon.  If you are going to hold for 3+ years it probably isnt that big of a deal.  The main issue is whether the return to you cashflow wise is better if you just pay the rehab and rent it traditionally.  Its really just a math problem.