Should I 'keep' the messy tenant who will pay post renovation rent without renovation?

Question

I'm in the middle of renovating a property that is C class in a nice B+ to A neighborhood.  The renovated units are renting quickly.  One guy has lived there for years and I don't think he has EVER cleaned his apartment.  Black funky mold in the shower, dust on the baseboards and door jambs.  But he pays on time and does not appear to cause any trouble.  I've had the place for about 5 months now, so don't have a long history with him.  Anyhow, he wants to stay and says he is willing to pay the higher, post renovation rent to stay in his current unit as it is.  Doesn't want to move into a renovated unit, just wants to stay put.

I'm changing the culture of the building and so inclined to move him along, but due to the state of his unit I will probably have a higher renovation expense on that unit.  And it may be worth noting that I like my buildings nice.  We keep them well maintained and tidy with the idea that good tenants want updated, clean spaces and are willing to pay a bit extra for them.

Do I let him stay, at least another year until all the other units are turned, or does he need to move on?  Maybe the messy apartment is a flag that there will be problems later on after the lease is renewed?

Roy N. · Answer

@John R.

We had very similar tenants three years ago  - did not want to be inconvenienced.  {Two years later they changed their minds and wanted to live in a freshly renovated unit - but that's another story].

At the time we were renovating vacant units and both filling them with new tenants and moving existing tenants to free more units for renovation.   When these tenants asked to remain in their existing unit, and still pay the increased rent, we sent our cleaning service in (at our expense) to thoroughly clean the apartment from top to bottom.  We then affected a few repairs that we saw as necessary.

As @Joe Fairless indicated, you are getting your desired rent increase, but with the renovation deferred .... just be certain to set aside a reserve to renovate that unit when the tenant does leave.

Jeremy Fields · Answer

Your tenant is allowed to keep a messy/untidy apartment, but not unclean. If his cleanliness is not up to your standards I would enact a new standard in the new lease you sign with him. This standard of course comes with stipulations that you may bring in a housekeeper at his expense and/or start eviction proceedings.

Inheriting a tenant always comes with challenges. Having the existing tenant pay the higher rent amount without renovations on your part sounds great. Keep the standard of cleanliness, pocket the extra rental income for the renovations that will come at some point, and prevent the unit from further degradation.

Aaron Thivierge · Answer

I would be inclined to let him stay and not renovate at the moment (** As long as the current conditions are not a health hazard nor detracting from the other tenants in that vicinity).  I could only imagine as nasty of the conditions that you describe, your rehab will be in vain as he will not care for and maintain your upgrades thus leading to more expenses upon his vacancy.  Up the rent, and enjoy your mailbox money.  Then, when the time is right (he is no longer living there), put the funds into that rehab.

Maggie Tasseron · Answer

The only red flag for me in your post is the word "mold". I think you need to determine if that is being caused by a leak of some kind or whether it is just mildew that showers and tubs commonly get. Explain to him that you do not want him to live in any sort of hazardous conditions so you need to check it out. Once you've done that, you will be able to determine if his unit needs immediate attention or if it is something that he is apparently willing to live with. Other than that, I understand your wanting to upgrade your building, but if his living conditions do not affect any other tenants, I would just keep renting to him as long as he does not pose any other problems. The fact that he doesn't even want to move into a renovated unit is in your favor as it sounds as though your reno efforts may be a waste of time and money in his case. Just raise his rent to that of the other units, and I would also ask him to sign something confirming that he has refused the renovations that you offered but is still wanting to stay on at the increased rent.

Joe Fairless · Answer

Well, with him paying post-renovation rent you are acheiving what you want on your balance sheet while saving money on the renovations for his unit. It depends on what your goals are for the property. If you are doing a long-term hold the I would keep him in there if he isn't causing trouble. If you are positioning for a new buyer soon then I would consider moving him out.

And, if there are any mold or health issues then I wold get them addressed now.

Rick C. · Answer

Are there any issues with his apartment that would lead you to believe that the maintenance expenses will be signficantly higher than the other units or is it simply dated/messy? If the latter, then I would keep him. No sense incurring a vacancy and renovation expense, only to re-rent it to someone that is going to pay a similar amount.

Nicole A. · Answer

I would agree with most of what's been said here. Sounds like you should probably keep him. Perhaps write up a letter that states that he agrees to the new rent increase and no renovations. Both of you sign it. Both of you keep a copy.

I kinda disagree with Barbara G.'s comment that this is a "serious problem." That seems a bit extreme. I do agree though that you should do inspections (with any unit!)...quarterly. I think unless there is an absolute need, if you're inspecting more than quarterly, you're a bit too invasive.

Yes, you can have a clause of general cleanliness, but also remember that your definition of clean is not necessarily the next person's definition of clean. She seems to be assuming that this guy's apartment is a health hazard, when we in fact don't know since we haven't seen it. "Mold in the shower" could be REALLY bad...or just a some in the grout....or somewhere in between where it's not honestly terrible, but I wouldn't wanna shower in there lol.

I second offering a one-time thorough cleaning service for him. But in the end, it's his life. You can't really control that they clean it to *your* standards.

Gabe Solomon · Answer

Like some of our colleagues here mentioned, I would not bother renovating his apartment, but I would address the mold issue immediately.  I would renew his lease for a one year term slightly below the new rate.  As long as he pays, keep him, monitor his living conditions and make sure he is aware of your "house rules" and agrees to live by them. Withe respect show him that it is your building and you own it.  I have a similar situation in one of my buildings  it seems to be a constant game of cat and mouse.  God Luck

Barbara G. · Answer

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You have  very serious problem here that should be addressed.  The above BP person solved his dirty tenant problem  by getting the apartment  cleaned and certainly that  is what shou;d be done at a minimun.   I would ask the tenant to pay for the cleaning.   It certainly would be worth  spending yur money if you could not agree to have him pay for the cleaning.

Once the apartment is cleaned and repaired I would tell him that he must have a cleaning service in on a regular basis with you or your PM inspecting it on a regular basis.

This tenant does not know how to clean and will never learn without the help of a cleaning service.  If he remains in your building without cleaning help He will destroy your building, and impact negatively on your building, and on your other tenants, and on your bottom line.

You must interviene.  You will be doing him a mental healt service and your self a service by insisting on a cleaning service

Please keep us updated as to how you are proceeding on handling this because this  is not an unusual problem and we all can profit from your experience

Colleen F. · Answer

The only thing I haven't seen people point out so far is whether his mess extends outside the unit.   Sometimes you get people who spread their stuff into the hallways.  I try to stop this but for some people you need to constantly remind them.  If he is one of these be sure to outline what the changes are going to be.  You are not going to be able to store xyz in the hallway anymore.

Should I 'keep' the messy tenant who will pay post renovation rent without renovation?

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