Tenant Requesting Repairs

[Marcus Crawford]

Question for all my landlords:

I have an out of state SF that is vacant. My property manager showed it to someone the other day who is requesting to do updates themselves prior to move in. The updates are all cosmetics, but what do guys think about allowing tenants to do cosmetic update themself if they have experience?

The potential tenant is willing to do 2 yr lease at a price that will cashflow the property $107/mo with 10% ConC return.
Thanks for your help guys. 

[Patricia Steiner]

I would decline both requests - the 2-year lease and the dyi renovations.  A one year lease allows you to assess both the market and tenant at lease end for a rent increase as well as whether to continue with the tenant.  And, you do not know the quality of the work that the tenant will do and/or their skill. Will you have to undo their renovations to release it?  What if something gets damaged during the process?  How will you gauge the return of the security deposit if you don't like the renovations? And, the one I hear often from other investors is that the tenant would technically be "improving" your property which is known to get thrown back in your face at the slightest disappointment.  I recommend simply telling them that the property cannot be altered for the protection of both parties and that the property is offered for a one year lease term.

I'm both a Broker and an Investor...often times that gift horse is really something quite the opposite.

Best...