Repairs/reno whilst still tenanted

Jenny,

You want to provide your tenants with new carpets and paint (increasing your expenses) and for them receiving this you wish to lower the rent (lowering your revenue) to a tenant who has just signed up a 12 month lease given the original conditions ???

I thought the general premise of business was to lower your costs and increase your revenues. In the instance you describe we seem to be going in the opposite direction….especially given that the items expensed are depreciable…i.e. they will never go up in value ??

Jen, IMHO you really do need to start investing in assets that actually make money for you, both from a cashflow and capital gain perspective. This constant wiping the nose of tenants for their domestic pleasure at your expense really does confound me ??

Hi Jenny,

I must differ from some of the other posts. If the place needs painting now, I’d do it while the tenants are in. I’d tell them the painters will need access for two weeks (or whatever) and they will have a freshly painted house. If they are hesitant, offer a rent reduction while the painters are in, but they may not ask for it. If they will be holidays, even better.

If you wait until their lease is over, two things could happen. 1. Painting may cost more because it has deteriorated more and needs more preparation = more money. 2. Painters will still need two weeks and you lose two weeks’ rent before you can even begin showing the place again.

I’d temper that with the comment that this depends on the tenant’s level of care for your property.

I’d do the same for the carpet. If the tenants seem like they would look after the place, I’d go for it.

Don’t forget to update your entry condition report to show the new paint and carpet.

If painting and carpet can wait and especially if leaving the painting will not mean more money to bring it back up to scratch, then possibly wait until the tenants are eight months into their lease and put it to them. It could then be used as a sweetener for them to stay another twelve months in a fresh house at an increased rent.

We added a house width x 5m deep deck to a queenslander while we had tenants. They were fantastic tenants and we reduced the rent ($20 a week I think) while the builder was in. They were happy, builder was happy, tenants got a fantastic outdoor living room. It depends on the tenant of course. Part of the deck was a box bay window which replaced the stove recess, and into which we put a new bench and cooker and downlights and a dishwasher. Tenants were ecstatic, our house value rose at least what we paid plus considerably more.

I don’t look at it as wiping whinging tenants’ noses. I look at it as increasing the value of our property while still getting rent during the paint or construction. When our deck tenants left, we were able to get new tenants quickly at a higher rent, with no downtime for painters or caprenters.

These same tenants asked us if they could put in a window air conditioner and make good when they left. We chose to install a split system in the living rooms (flows into bedrooms as well). Having the deck and air conditioning made renting it soooooo easy next time.

This same house, we plan to turn the front entry (was a verandah, long closed in) into a proper bedroom and move the front door, giving us a four bedroom house. Our tenants have just signed up for a third 12 month lease so we will leave them be for the moment. I would like to do this while they are in situ for the same reasons as we did the deck with tenants in.

My thoughts, Wylie.