It is common for absentee landlords to have tenant managers, at least around here for small 6 to 8 unit buildings. where they live rent free, or at least 50% rent free.
If you want to minimize risks, you should pay a nominal salary, such as $100.00/month, besides free rent, put him on the payroll, make the deductions, pay the payroll taxes, workmen’s comp etc., and then buy adequate liability insurance.
To be absolutely safe, have a professional employee background check done, and keep it on file. You could have big problems if this guy is a pedophile, you gave him the keys, and he molested some tenant. With a professional background check, at least you can blame the company doing the checks.
This way, if he’s hurt shoveling snow, you’re covered, he assaults a tenant, you’re covered.
Be also careful of this guy doing favors for tenants such as installing window AC’s. If it falls out the window, and hit someone, you’re on the hook.
I run a small business where it is common for employers and employees to be “off the books”. But because I insisted that we be “on the books”, there was a serious accident a while back, the employee was covered under workman’s comp. Under state law, he’s not even allowed to sue when he’s covered under workman’s comp.
Had he been off the books, I, or at least the corporation would be wiped out. But I got liability insurance besides.