Tenant asked for upgrade

[Austin Smith]

Last January I purchased a triplex. At that time one unit was vacant, so we remodeled it before filling it. New plaster,  new kitchen & bathroom, all new flooring. Fairly extensive rehab.  This month I had another unit come vacant, so we did virtually the same thing to it. Today I was at the property dropping off some materials, and the tenant in the unit we have done little improvement to approached me. He asked if there was anyway we would consider removing the wall paneling and installing drywall/plaster as we have in the other units. He offered to pay partially for it, although I doubt he realizes what the cost of the upgrade would be.  He said he would be willing to vacation while the work was done. His rent is currently at $625, I think market rate is $775. I bumped him up $25 last summer and was planning on doing the same this year. My thoughts are I was planning on doing the upgrades once he moved out anyway, and if I could get him to cover some of the cost, it may be worth doing now.  Or on the other hand, I could say no and bump the rent anyways. But in the case he would get mad and move out, I could get my rent up to market rate immediately after the rehab. What are your thoughts, what would you do?

[Mike D'Arrigo]

@Austin Smith How long has he been there and what kind of tenant has he been? If he's been a good tenant and always pays the rent on time, you might as well work with him since you're planning on doing the upgrade anways? Why not do what you are already planning to do and look like a hero? Plus, it would be to your benefit. If you wait until he moves out, you're going to lose time getting it rented again while you do the work. This looks like a win/win to me.