I just finished the rehab on one of my properties. I didnt have enough money to finish the basement. Well now the tenant wants to pay to have it completed. What do you recommend? :help
Absoutely not. Who do you think is going to care more and do a better job, you or the tenant? Who do you think will get billed for all of it (so you’re going to pay for it anyway)? They’ll probably claim their labor is worth $50/hour.
If you were planning on finishing it out, I would do it yourself or with your own people when you have the money. Otherwise, you’re asking for trouble.
Also consider potential injuries while the tenant would be working. Just not a good idea.
Only under certain conditions would I allow them to pay for the job.
1st they have to have the money, because if they don’t the contractor will put a lean on your house. And you will have to pay it.
2nd I get to choose the contractor, no friend of a friend thing, or relative that needs a job.
3rd only with the complete understanding that all improvements stay after completion and if for any reason they cannot pay rent the fact that they put money into the basement cannot be considered rent and that they are doing so at their own risk.
If that is not enough to scare them off then, I could probably come up with more.
No way would I let any tenant do any substantial work on my house. You are getting away fro division of labor. It is like letting your girlfriend use your cell phone. Next thing you know she is going toe want to read your texts.
Hell yes. Depends on what they are going to do and how big the project is AND most importantly what skills does your tenant bring to the table?
I have done this with zero problems. I have never paid for their labor just materials and I tell them what they can and cant buy, etc. etc.
I have had no personal experience with this but other real estate investors I know have had this work out very well. Completely agree with Gordo. Do not run away from this, this could work out well for both parties.
Tenants that feel that they will be renting for a long time usually want to make small changes. I have had friends that actually did a decent amount of remodelling with the landlords approval. The tenants get to personalize their living space and the landlord gets free maintanence and updating. win-win
I agree with the last two posters. But have you seen any work that this tenant has completed? Does he have any skills? Try him on a small job first, in order to evaluate what he can do.
This will just be a common-sense judgment, based on what you know of the tenant.