Potential Tenant negotiating rent by offering to upgrade home

Rental Property Investor · Orlando, FL · Member since 2015 · 353 posts · 269 votes

Hello All,

Recently my wife and I have bought our second rental property and have been self marketing it at 1500/month. Some info about the house - it is a 4/2 in a great area, but it has no back exit, so you have to walk through the front and all the way around to get to the backyard. We had a showing with a potential tenant this week, who offered to install a rear door, small concrete pad, dense sections to keep his dog in, and an outdoor light fixture. He said all improvements would be made upon my approval and in return I would drop the rent to 1400/month. Is this a totally bad idea to even consider? Your opinions are appreciated!

0 Reply

35 views

Most Popular Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

Never allow a tenant to do any work on your property. The work never gets completed, is of poor quality or creates a situation where the tenant repeatedly attempts to negotiate rent. Charge market rent and if you want work done hire a licenced contractor or do it yourself.

Never negotiate rent with a tenant.

3 Reply

See this reply in the discussion

8 Replies

Jump to latestLatest

Sort by

Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y
Never allow a tenant to do any work on your property. The work never gets completed, is of poor quality or creates a situation where the tenant repeatedly attempts to negotiate rent. Charge market rent and if you want work done hire a licenced contractor or do it yourself.
Never negotiate rent with a tenant.
3 Reply
Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
9y
@Matt Leber I would strongly agree with @Thomas S. You have no idea their track record on projects and this scope of work. That possible tenant might be an IT guy that worked with a GC for six months ten years ago, and now wants to negotiate rent of the little knowledge he/she has.
The best thing to do is to see what type of upgrades they are talking about, see if that is something you want to do, and then have the right person for that job come out there (i.e. licensed GC, licensed electrician, or licensed plumber).
The McKernan Group4.957 Reviews
Website View Page
0 Reply
Steve RozenbergPro Member
Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
9y
In all my years of owning rental properties and owning a management company this can be the start of a very bad business relationship. Your definition of quality work and theirs could be polar opposite of each other. Also when you do allow this you are setting a precedent that could come back to bite you down the road if the relationship ever gets toxic and litigious which it very often does.
I suggest you keep it where they pay rent and you manage the property and fix, repair , upgrade what you as the owner feel is needed, not what they want.
0 Reply
Gail K.
Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes
9y
The thought of an applicant doing such should strike fear in the heart of every landlord. In other words if YOU wish to have a back door added you do it; not a tenant.
Keep in mind this guy offering this was for HIS benefit (allowing easy access to the backyard for his dog), not for YOUR benefit.
Gail
0 Reply
Andrew B.
Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
9y
Only allow licensed and insured contractors tow work on your property, especially something of this scale.
some things that can go wrong here: you reduce rent to 1400 for one year, then he moves out and files mechanics lien because he says work was worth more than 1200...he tries to claim you cant ever raise rent because of this....his idea of quality work is different than your idea of quality work, and now your already stuck in a lease for 1400 a month....he feels since he did this work, you owe him or he starts doing work on other things without approval....the list goes on.
While I don't recommend it, you can allow him to do work if he is licensed and insured, but keep everything separate. write up a lease for 1500 a month, then a contract for scope of work, offering 100 credit per month for a certain number of months not to take effect until you sign off on quality of work. this allows you to separate income and expenses for tax purposes and capital improvement tracking.
Honestly, there are too many negatives, too few positives, and too much work to recommend allowing it.
1 Reply
Bryan O.
Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
9y
@Matt Leber I agree with everyone else, with a small caveat. If he is actually capable of the work then you could consider hiring him. NEVER negotiate rent for work. Rent is rent and will always be rent. That said, I have a tenant that is an electrician and have in the past hired him to do some minor work in the house they rent. This is a separate agreement outside of the lease and will never impact his rent. Generically speaking, don't do it.
1 Reply
Max T.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
9y
Bad idea. If you want the changes then pay him or someone else to do it and keep rent the same.
0 Reply
Beth L.
Investor · Hagerstown, MD · Member since 2014 · 299 posts · 140 votes
9y
I agree. I have a tenant whose brother is a contractor and I let him do a few really minor things no charge with the brothers help. I also hired him to paint out some of my units at turnover. But I will never give credits for rent.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.