Renting to a Contractor in exchange for work

[Robert Lei]

I am currently renovating one of my units by myself. I’m a first timer everything, so it’s taking a while. However, I am deploying for 3 months at the end of this month. That means all work would have to stop, and won’t be completed till I get back, which means the earliest I can get a tenant in that unit is May, when I come back and finish the work myself.

There was an issue in another unit, and I hired a plumber, who turned out to be a general contractor. This GC found out I was deploying, and asked about renting my house hacked unit to a guy he brings in for seasonal work (~3 months). Long story short, I don’t want to, but the GC finds out about the reno unit, and offers to finish the work in exchange for housing his guy.

I really like the idea of exchanging rent for labor, especially since I can’t do it myself while I am gone. I was going to rent the unit for ~$950, and I would essentially get $2850($950x3 months) worth of “credits” from this GC. I offered to pay the difference of what it actually cost him and 3months rent (so if billed labor was $3k, I’d just pay the GC $150).

Reasons why I like this:

-Building rapport with this GC and his businesses

-I get my reno done professionally at a heavily discounted price or potentially free

-unit was going to sit empty anyways during my deployment, but now has a handy guy living in it

-short term deal with the GC, at most I would sign a 6 months contract and charge the actual amount beyond the cost of reno

Things I am getting done:

-Laminate floors install and base boards

-Cosmetic touch ups in bathroom (to include dry wall)

-new front door/frame install

-putting up ceiling fans

-replacing cast iron pipes for sewer lines

Would it be a good deal, all things considered?

tl;dr Deploying because of the military, renovation has to stop. Renting short term to a general contractor, who will finish the renovation in exchange for his rent

[Theresa Harris]

@Robert Lei  Go ahead and rent it to him, but charge him rent and pay him for the work-keep the two separate.  Get it all in writing along with a timeline.  If in the current state it would rent for $900 and he says it would take 3 months and in the renoed state it would rent for $1000, charge him $900 rent for the first 3 months and then $1000 for every month after.  this means if the renos take longer, you're not losing money and he has no incentive for the work to take longer and get a lower rent.