Should You Give Tenants Discounts For Helping Out Around Your Rental Property? | Nexus Property Management® Franchise

17 April 2024

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3 REASONS WHY WHAT SEEMS LIKE A CONVENIENCE COULD BE ANYTHING BUT

It’s no secret that the physical maintenance issues and weekly or seasonal chores that naturally come with rental property ownership can be a pain in the neck. That reality is a large part of why professional property management companies are in such high demand. But if you’re someone who has opted to manage your own building(s) and a tenant offers to help around the property in exchange for a reduction in rent, should you take the bait?

WHY THE ANSWER COULD BE YES

Having a tenant take the trash out, or cut the grass, or sweep hallways and stairs, or shovel walkways would obviously mean that you don’t have to…which is great. That in itself could be a win if the headache of tending to those issues is significant enough for you. Yes, it will cost you some of your rental income, but maybe it’s worth it to you.

WHY THE ANSWER SHOULD BE NO

First of all, if you’re interested in paying someone to perform work at your property for you it sounds like you might be in the market for a property manager and you don’t realize it. Why pay a tenant (ultimately that’s what you’re doing by reducing rent) when you could pay a professional [A highly reputable company we know of charges just 8% of rent collected for their management fee]. But more importantly than trying to garner business for ourselves, here are several reasons why you don’t want to enter into this type of relationship:

1. YOU STILL NEED TO GO TO THE PROPERTY

Unless you’ve installed cameras or have some other means of surveillance, you will likely still need to ensure that these tasks have been taken care of. If a tenant is saving $100 a month for sweeping the stairwells and taking the trash out, you’ll hear from other tenants if there are issues with the trash, but the shape your common areas are in are a mystery unless you go yourself…so ultimately, you’re still spending time you were hoping not to because it’s still your responsibility to ensure the space is safe and tidy.

LEARN MORE: MAINTENANCE IS THE NUMBER ONE POINT OF FRICTION WITH PROPERTY OWNERS

2. YOU LOSE YOUR LEVERAGE

Tenants pay you rent because they need a place to live. They need you. The exchange of payment for shelter is clean, reliable, and it creates a win-win for both parties. But when tenants start doing work around the building, that relationship is altered. Depending on how much work they’re doing, you might end up needing them more than they need you. If that tenant is late on rent and has an excuse as to why they’ll be a week late going forward, you’ve lost your leverage. If their own unit is a mess and it’s spilling into the yard (that they now feel they have ownership of), you’ve got a problem that needs to be addressed immediately. The responsibility of tenants is to pay their rent on time and keep the property in the condition it was given to them. When you tack on more responsibilities, you change their relationship with you and the property, and conflict is inevitable.

LEARN MORE: THE HIDDEN VALUE OF UNDERSTANDING A LANDLORD’S RELATIONSHIP WITH TENANTS

3. YOU OFFSET THE BALANCE BETWEEN TENANTS

Speaking of conflict, it’s also common that this type of relationship creates an imbalance between tenants. “Oh hey, I heard the guy in 2F is cutting the grass for $100 bucks. How about you let me do the bushes and I’ll take the trash out for $100 too?”, “…why’s he getting a discount that I’m not?”. Maybe you can count on “your guy” to handle this professionally and without incident, but it’s much more likely that this arrangement will be seen as special treatment and both conflict and resentment are sure to follow. It is always in your best interest to treat all of your tenants equally.

LEARN MORE: WHAT TO DO WHEN YOUR TENANTS HAVE CONFLICTS WITH EACH OTHER?

WHAT’S THE BEST SOLUTION?

There are two simple and really non-negotiable steps you can choose from: First, is a simple, “no thankyou”. Let the tenant know you’re appreciative of the offer but you’d prefer to handle all issues on your own. Simple enough. The second option is just as easy and the arrangement we see most often: let the tenant perform those tasks but without any compensation. Encouraging tenants to maintain and take pride in your property is another win-win…we all want to live in nice places. Landlords who can focus tenant motivations away from financial consideration and toward a higher quality of life will always be most successful in creating long term tenancy with minimal hassles and conflicts.

LEARN MORE: THE POWER AND INFLUENCE OF ALIGNED INTERESTS

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Mick Lefort is the Vice President of Operations for Nexus Property Management®. A National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

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