Newbie Needing Advice - Shower Mishap With Tenant

[Billy Davidson]

Hi BP,

I recently purchased a 4 bed 3 bath house and have turned it into a duplex. The downstairs is 2 bed 1 bath and has been rented out to one person, while the upstairs is 2 bed 2 bath and has two people living in it. When I first bought the house, I remodeled the downstairs to make it up to date and easier to rent out for a higher price. The upstairs seemed rent ready when I first bought it, so I made very few changes to it. Here I am 6 months into being a new landlord and have run into my first incident. 

The Issue At Hand: 

I got a call from the downstairs tenant stating water had been leaking from the ceiling and onto her bed. At first, we thought the issue might be coming from the loose toilet and so a plumber came out to diagnose the situation. The plumber told me he fixed the toilet and that everything should be okay. The following night, I received another call stating the leaking water has continued. I had the same plumber go over to the house and he told me the leak was actually coming from the master shower because it had old grout. It caused a hole in the downstairs tenant's ceiling and water leaked all over the tenant's bed. The top tenant has another shower to use and has been using it in the meantime, but I have some questions.

Questions: 

1. 1) How would you compensate the downstairs tenants rent for the month? Obviously, the shower water got all over the tenants bed and the tenant had to wash the sheets as well as anything else that got water damage. The tenant now has a hole in their ceiling and has mentioned the hole was smelly.

My next questions are in regards to repairing the shower. 

Currently, I live 60 miles away from my rental property due to my current job situation. I do hope that one day I can move back and live on the top floor, but do not know when that will be. With this being said, the upstairs is somewhat out of date and so I am wondering how should I repair this shower?

1. 1) Just re grout the shower only?
2. Or
3. 2) Update the bathroom and make it more modern? (Shower, vanity, toilet, etc.) This could make it easier to rent out in the future and could allow me to increase rent. On top of this, when I do decide to move back I will have something that I would be proud to use.
4. 3) If I were to do #2, how should I compensate the tenant upstairs since one of their bathrooms will be out of commission. Also, the upstairs tenants are in the military and are getting deployed in 2 months, so the lease will be up in the near future.

Any thoughts or suggestions would be greatly appreciated.