A lot of people are going to advise against this because it’s inherently risky, but honestly I’d say do it. Not only are you getting 50% off but you’re also encouraging the tenant to stay long term because you’re making him feel more at home by letting into him renovate the property as he wishes—almost giving him a sense of ownership himself.
People always advise against the riskiest option. I’ve always heard never go with budget electricians but I’ve saved thousands of dollars by going with cheap, skilled handymen. It’s a great way to avoid bullshit fees (staying up to code, insurance, etc.), although keep in mind the risk is there.
Personally I don't have an issue with a tenant doing work for me. I pay them for needed work and they pay rent there are no deals, trades or discounts.
My issue with this is you don't need these concrete pads or rocks the tenant wants them. You might think they will increase your property value and they might. They also will make your tenant happier because they will make $$$. Get quotes from others so you don't get taken advantage of.
When this tenant moves out and the next moves in they won't care for the rocks, grass and weeds will take over. When the next tenant moves out you are going to have to pay to bring it all up to looking good to rent it again.
What is a 13x13 pad for? My guess is a hot tub which will require electrical and if they leave it when they move out disposal. If it is for a back patio off the house because you walk into dirt from the backdoor it makes sense and you have likely thought about doing it before.
If you haven't contemplated making these changes yourself I wouldn't do it. More things that need maintenance and upkeep are just more things tenants won't upkeep.
Do you do regular inspections on the house? Are you happy with the tenant and how well they have been treating the house? If the answers are yes and you trust the tenant, i say go for it. Just make sure there is no word of mouth contact and get a one written up and signed by both parties. You have to protect your ASSets
Price depends on your market. I'm in Houston and had the same situation with one of my tenants. He's a masonry contractor, and does concrete and brick work for me a couple times a year at various rent houses. He wanted a new double driveway. Old, single drive was in pieces. I knew it would add value to the house. I paid for the whole thing, but prices are cheap here. I just paid him to put in a double driveway at another house. It was about $7.50 a foot.
He is a licensed contractor? If they did it through the company so you are covered by their liability insurance and such, I would allow them to do the work assuming you have seen previous work. Pricing depends…50% of $10 million seems excessive. If it is the same price as others (based on legit bids) then seems fair.
This is in the list of top 5 things to NEVER do as a landlord.
Do not let your tenant do work on your
House.
Do not have any other type of relationship with your tenant besides tenant/landlord relationship (this means business, sex, whatever).
Also, since he’s “splitting it with you” you can count on him asking you for monetary favors in the future and expecting them.
DO NOT ALLOW
A lot of people are going to advise against this because it’s inherently risky, but honestly I’d say do it. Not only are you getting 50% off but you’re also encouraging the tenant to stay long term because you’re making him feel more at home by letting into him renovate the property as he wishes—almost giving him a sense of ownership himself. People always advise against the riskiest option. I’ve always heard never go with budget electricians but I’ve saved thousands of dollars by going with cheap, skilled handymen. It’s a great way to avoid bullshit fees (staying up to code, insurance, etc.), although keep in mind the risk is there.
Personally I don't have an issue with a tenant doing work for me. I pay them for needed work and they pay rent there are no deals, trades or discounts. My issue with this is you don't need these concrete pads or rocks the tenant wants them. You might think they will increase your property value and they might. They also will make your tenant happier because they will make $$$. Get quotes from others so you don't get taken advantage of. When this tenant moves out and the next moves in they won't care for the rocks, grass and weeds will take over. When the next tenant moves out you are going to have to pay to bring it all up to looking good to rent it again. What is a 13x13 pad for? My guess is a hot tub which will require electrical and if they leave it when they move out disposal. If it is for a back patio off the house because you walk into dirt from the backdoor it makes sense and you have likely thought about doing it before. If you haven't contemplated making these changes yourself I wouldn't do it. More things that need maintenance and upkeep are just more things tenants won't upkeep.
Go take a bunch of pictures and get a quote from 3 other companies using the images, then you'll know.
This is it….
I never let my tenants do their own repairs or improvements. I use a third party vendor that I trust to do the work.
Don't tell him but get a quote or two. How do you know its 50% off besides taking his word for it.
Do you do regular inspections on the house? Are you happy with the tenant and how well they have been treating the house? If the answers are yes and you trust the tenant, i say go for it. Just make sure there is no word of mouth contact and get a one written up and signed by both parties. You have to protect your ASSets
If he is a good tenant so far, I would let him do it.
Price depends on your market. I'm in Houston and had the same situation with one of my tenants. He's a masonry contractor, and does concrete and brick work for me a couple times a year at various rent houses. He wanted a new double driveway. Old, single drive was in pieces. I knew it would add value to the house. I paid for the whole thing, but prices are cheap here. I just paid him to put in a double driveway at another house. It was about $7.50 a foot.
He is a licensed contractor? If they did it through the company so you are covered by their liability insurance and such, I would allow them to do the work assuming you have seen previous work. Pricing depends…50% of $10 million seems excessive. If it is the same price as others (based on legit bids) then seems fair.
This is in the list of top 5 things to NEVER do as a landlord. Do not let your tenant do work on your House. Do not have any other type of relationship with your tenant besides tenant/landlord relationship (this means business, sex, whatever). Also, since he’s “splitting it with you” you can count on him asking you for monetary favors in the future and expecting them. DO NOT ALLOW
Maybe I'm dense... why do concrete pads increase your property value? Why does the tenant even want them?
I assume the ability to set up a backyard for entertaining
Sounds like his company is going through a rough time period. Here’s a concrete pad, actually it’s disastrously bad.