Bartering With Specific Tenant Requests
By JD Esajian on June 2, 2014
Tenants come in all shapes and sizes. There will come a time when, as a landlord, you receive very strange tenant requests. Having said that, landlords need to lay down a firm set of rules and be willing to enforce them. The minute your tenants sense any weakness, there is a natural tendency to pounce. If you own rental property long enough, you will eventually hear every excuse and request you can think of to avoid paying rent or getting it at a discount. Your tenants may have the best intentions, but if you need to be able to separate your tenant as someone who does work for you and someone who lives in your property.
The most common bartering chip deals with tenants who want to do work on the property to offset some or all of the rent. You may view this as a fair trade if you have been putting this off for some time, but you could be opening up a whole new can of worms you won’t be able to close. There is nothing wrong with having your tenant do some work, but you need to keep any payments separate from your rental business. You should treat their work as you would any other contractor that you would hire on your property. Get a written estimate with a detailed outline of exactly what they are going to do and when. If you treat them any differently, they will slowly take advantage of your generosity.
If something needs to be done, you should be the one pointing it out and not the other way around. Unless your property is brand new, you can probably find little things that can be done throughout the house. Some of these may be real and some can be fabricated. If your tenant tells you they are handy during the application process, ask them what their area of expertise is and tell them you will keep them in mind if there is anything that comes up around the house. You can tell them you have multiple contractors you work with, but you will give them a chance to make a bid. Doing it this way alleviates the prospect of them trying to take advantage of you and inflate their estimates. It also sets the groundwork that you have other options if something does come up and you will not be forced into using them even though they live in the property.
One beneficial bartering practice is offering an incentive for paying the rent on time every month. Even though this should be done consistently it is the exception rather than the norm. You don’t have to give away the farm for a timely payment but just something to let them know you appreciate them as tenants. A preferred parking space, movie tickets and even a small toy for their kids can have a big impact. A $20 toy for paying their rent on time is certainly not necessary but it could make all the difference between having your tenant stay for another year and you having to go through the process of finding a new tenant.
There is a fine line between being nice to your tenants and getting walked over. As the landlord, you always need to be in control of every situation. You can barter with your tenant and offer incentives, but you must always keep the big picture in mind.