Should I keep my building Super or rent out unit for full market?

Should I keep my building Super or rent out unit for full market?

Rental Property Investor · Red Bank, NJ · Member since 2015 · 81 posts · 18 votes

My Super and I haven't been getting along lately.  He's helps me manage a 6 family multi and he occupies one of the units with his 2 kids.  I'm trying to decide whether we should go our separate ways or if I just need to do a better job managing him.

First off, he's not a bad guy and I trust him.  He pays $1000/mo in rent, which is about $500 undermarket.  Plus I pay him $150 for basic maintenance (grass cutting 5 mo of the yr, snow shovelling walkways 3-7x a yr, light hallway cleaning, occasionally helps w/ lockouts, takes the garbages out on the correct days, etc.).

In addition, as the building Super he keeps his tools in the basement and I give him some additional storage down there. He also gets sole use of the driveway which is a perk b/c he has an F150 that would be difficult to park on the street.

I also give him extra money for additional side jobs. In the past few months he's been paid about $25-30 an hour to do some roofing and gutter work, laid down new linoleum in one of the bathrooms, porch repair, etc... 

The issue is he feels I keep asking him to do more and more (as part of regular maintenance) and I "don't treat him as an equal".  For instance, I asked him to repair a broken window and install a deadbolt just yesterday. He routinely hauls some construction garbage off the premises when it builds up (from remodeling the units). In my mind, I try to keep him busy and keep making incremental improvements at the house.

I feel that he complains and whines about things instead of simply communicating when his workload requires additional pay. I feel he's being ungrateful at times for the $650+ per/mo in benefits for typically 7-8 hours of work per month.

We've had the same issue several times in the last couple months. Do I need to manage better or is it time to go our separate ways? I certainly like having the extra eyes on the place (I live 25 mins away), but perhaps a change is in order. Or maybe I'm just a bad manager of him?

Apologies for being long-winded with this....

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Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
10y

People tend to take the money they're not charged for granted. You might want to raise his rent to market and give him a credit on it for 500/mo for the building-super duties. I'm unsure of the legalities of doing this, but then he sees the benefit he's getting. I'm also unsure doing so would mean you need to be careful of having him presumed to be an employee. 

You may also want to just offer him market rent and no other duties. (But remain professional when you do this -- not when he's complaining or you're complaining about something)

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  • Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
    10y

    People tend to take the money they're not charged for granted. You might want to raise his rent to market and give him a credit on it for 500/mo for the building-super duties. I'm unsure of the legalities of doing this, but then he sees the benefit he's getting. I'm also unsure doing so would mean you need to be careful of having him presumed to be an employee. 

    You may also want to just offer him market rent and no other duties. (But remain professional when you do this -- not when he's complaining or you're complaining about something)

  • Rental Property Investor · Red Bank, NJ · Member since 2015 · 81 posts · 18 votes
    10y

    Thank you @Wes Brand  I think you made a very good point about him taking a low rent for granted. He may not feel that's part of his compensation. 

    I'll be meeting with my Super today trying to salvage the relationship, if possible. 

  • Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    10y

    I don't know why you would need on site management for a 6 unit. Sounds like you could hire a decent PM for less. 

  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    Without (hopefully) sounding like an ***, it actually sounds like you are getting the better end of the deal. For $650 per month (let's assume you can actually rent it at $1500/mo), you get:

    7 months of grass cutting (I grew up in Orange, and there's more than 5 months of grass cutting in NJ);

    Snow shoveling services as needed 4 months of the year;

    Use of his tools for repairs and maintenance done at your request;

    Occasional administrative duties;

    Trash hauling;

    A trusted set of "eyes on the place";

    A reliably rented apartment. 

    Personally, I wouldn't do what you've listed for $650 in consideration per month (it's not cash, because he may rent another place at $1200, for example). 

    Skyline Properties
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  • Investor · Silver Spring, MD · Member since 2016 · 61 posts · 18 votes
    10y

    I have to go along with Jd Martin.  Make sure you price out ALL of the activities that your super currently does and make sure you are not cutting off your nose to spite your face.

    I know supers who get 100 percent free apartment with extra paid for side jobs, so I think you are making out pretty good.

  • Rental Property Investor · Red Bank, NJ · Member since 2015 · 81 posts · 18 votes
    10y

    Thanks @Ryan Dossey

    I appreciate all your thoughts.  I'd like to find a solution that works out for both of us, but it should be noted that he's working less than 8 hours a month on average.  

    Having a night to sleep on this, I'm thinking it may be time to part ways and hire professional management. The constant complaining isn't worth it and $1500 current market rent would be on the low side. (utilities are included for all tenants and he has 3 people living in a one bedroom).

  • Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    10y

    Good Call @Mark Gee

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