Renting to Property Manager?

[Jeff Collier]

First, I'm a complete rookie in this space, so bear with me!

I've got a unique situation with a rental property and would love to hear what the BP community thinks. In September, I purchased a pair of old homes that were converted to multi-family properties. Each house has 4 1-bedroom apartments, and one of the houses also had a basement efficiency unit.

I'm currently in the process of working with my property manager to make updates and renovate the facilities. Early in the process, he had expressed interest in renting the efficiency as a local base for his rental property business (his offices are about 45-60 minutes away in another market, but he has a large number of doors in my area as well). We discussed details, and agreed on a rent amount that would have been what I was to rent the efficiency for anyways. Plus, there will be no property management fees, and he will even provide free labor to update the efficiency (as approved).

We've discussed that the unit would have to be easily convertible back to a LTR should he leave.

My question to the BP community is this: Is there anything else (beyond what I've mentioned and the standard needs for leases) I should be considering when drawing up a lease for this arrangement? I'd like to use a BP lease agreement as the baseline, as I think it would be best to keep this scenario at an arm's length from the property management services as much as possible.

For what it's worth, I do think this is a positive arrangement and will be beneficial to both of us. He gets a convenient space to operate for some of his local clients, and I have a unit rented and my own property management effectively on site for many days of each week. Just trying to be sure I understand the nuances as best as possible.

Feedback much appreciated!

[Bjorn Ahlblad]

@Jeff Collier you want to use the same lease for all your tenants. When I had a PM I stayed out of their hair completely. Never met tenants or even knew their names. Check the PM out just like you would anyone else. The free work? Personally I would not do that........I'd pay him and take the deduction. All the best!