Here's a question to all the landlords on the forum:
A new tenant (not on a fixed tenancy agreement; month to month is standard in the market where this house is located) has marched into my property manager's office stating the house is too cold (gas heating) and requesting additional heating. They have also made a request for a power outlet to be added to the bedroom. I have received 3 quotes for a heat pump ($2000-$3000) and the installation of a power plug ($300 give or take).
They have only just moved in.
Though the addition of a heat pump is something I had already considered, as it is highly sought out in this particularly cold environment and it would make the house more marketable to prospective tenants, this tenant knew one was not already installed when she moved in. The rent was priced accordingly (lower than comparable properties with a heat pump installed). The power outlet is not something I had planned, nor will it add value, though I am considering it as I like to remain open to my tenants' requests and provide good customer service.
If I install the heat pump and power outlet, I feel an increase in the rent would be appropriate. Ordinarily I need to give 60 days notice to do so.
I could send out a rent increase letter stating the heat pump would be installed in 60 days time and at that time the rent would increase; giving the tenant the option of agreeing to or foregoing the expense and moving if they felt it warranted. However, given the weather, the PM has indicated the tenant would like the heating fixed immediately.
Is it appropriate, in this instance, to request the tenant forego the 60 days and agree to an immediate rent increase in exchange for an immediate installation of a heat pump? If so, how would I word this request?
Cheers
Put the heat pump in and lend them an extension cord
As you say, the tenant rented the property knowing the facilities that were or were not there. You can certainly discuss improvements, but I would not be improving anything for a new tenant, without hiking up the rent. For something that costs $2k I'd be talking at least $15 per week extra.
What's the power outlet you are talking about? Do you mean a powerpoint? Why is it $300? The powerpoint itself costs about $25 and then you pay for the electrician's time (an hour at about $80 per hour).
It is very nice that the tenant wants things immediately, but it doesn't mean they will get it. The things I tend to immediately are problems with the electrics and plumbing that were already in place. I also fix problems with windows and external doors immediately. Everything else is not urgent and is a nice to have. Maybe discuss the rent increase with the tenant in exchange for the heat pump. Place the work order for the sparky to install it but be clear in saying to the sparky not to do the job any earlier than 6-8 weeks from today. By the time he does it and invoices you, the tenant will be on the new increased rent.
You cannot forego the 60 days notice.
If the tenant is that upset about warmth, he or she can do two things. One is put on warmer clothing. The other is to buy him or herself a cheap portable heater from the hardware store.
Do not let your property manager bully you into doing things immediately just because the tenant wants it. It is great to hear requests but they are just that. Requests. They are not obligations.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Further to Freckle's comment, my electrician has suggested the same. Give them a powerboard that has a long extension lead on it. This is appropriate in cases such as buildings where the roof is quite flat, and to add a powerpoint means the sparky literally has to lift the roof. Too much effort and cost.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Ah, the voices of reason. Thanks so much for the comments!
Yes, a powerpoint is what the tenant was referring to. It's an old (early 1900's) house, but I haven't spoken with the Sparky as to why it costs so much. The tenant previous to this one did have a powerboard and extension lead, but it stretched right across the hallway. Tripping hazard?
Should have bought under a LLC
Get a few of those 3M things that stick to the wall with little circles on them. An extension lead can go up the wall, across the ceiling and back down again. Pity about not being able to close the bedroom door but oh well. As we said. Tenant knew the product he/she was renting up front. You do not buy a hatchback and then whine that you want it upgraded to a Porsche for free.
Here is a link that gives you a rough idea what I am on about
You need to understand the property manager's mindset. If you agree to everything first shot, it is less work for them because the tenant will be quietened and not contact the PM all the time. So probably, the PM is trying to talk you into the heating. It is fine to listen to their advice and opinion to help you understand where your property sits on the market in terms of demand, but you still need to think about it and decide for yourself. If the place was empty with no tenant and all prospective tenants were saying "if only it had heating i would rent it" then sure. But it ain't empty, is it
You also need to remember, you are the boss of this property. Not the tenant and not the PM. It's not a democracy.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Great points here crew.
My 2 cents? I'd pay for the power point, $300 is high for a power point but maybe approach a sparky directly and get a better price. As JacM said power and plumbing, just go with it.
As for the heat pump, will it add value via rent, better value for sale, and depreciation? Sure. I do pay for things, I have added a new antenna (happy family tenants are watching tv and not bugging the pm), a security screen door (tenant is a well paying single woman who wants to live for ever there) so sure, I weigh up cost, annoyance factor, pm annoyance factor before I start getting out the pennies.
Happy tenants don't leave, they pay rent on time and sometimes before. They take care of the property and it is their home. Happy property managers call you like you are their best friend, fix tiny problems for you at no cost and will go out of their way to help you, and your tenants. I'd consider putting the heat pump in.
I'd pay, then I'd make them pay me more!
Cheers
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeIs this a USA property?
Given you could invest up to $3K on a heat pump it would be worth having extensive and assertive conversation with PM to see if tenant is prepared to sign a lease (do they exist in US?) I would like some certainty of tenancy before I spent that much money.
Sounds like this tenant is going to be a nuisance, always asking for more facilities and not paying more rent. Maybe the tenant needs to be changed instead !
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JacM wrote:Sounds like this tenant is going to be a nuisance, always asking for more facilities and not paying more rent. Maybe the tenant needs to be changed instead !I was thinking along the same lines.
dgirl, although your intentions are good, it's really important how you manage the tenant/owner/PM relationship. When you have worked out what you're going to do and how much you'll need to increase the rent by, make sure that you return to the PM with specific details and dates ie. I'm willing to install xyz, which would result in a rent increase of $$/week. If the tenant wishes to proceed I'll need you to issue a notification of a rent increase to occur in 60days, with the installations scheduled for the week before the rent increases…
Showing that you are willing to make adjustments to the property for a fair rent increase is the best way to put some accountability back on to the tenant for their demands.
Buy them a jumper and scarf. Tell them It’s an early christmas present.
Jesus christ put the heat pump in and install a powerpoint. No wonder land lords have a bad rep.
I make no apology for my opinion on this. The tenant rented the place knowing its condition and now wants a free upgrade. While the question has not been asked "is the tenant willing to pay more rent" I doubt they are offering to do so. Being a landlord is not supposed to involve conducting oneself as a charity. Being a landlord is a business. Yes you have obligations to fill, but a landlord's IP is also a business that should not be running at a loss.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Paullie,
I rented for about 10 years (finally got tired of it), while at the same time being a landlord. I make sure that I am fair, I work with the tenants and pm's as best I can. Not all landlords are the same or work the same wat, and I think your comment just adds to the myth that landlords all suck.
I think some of the comments here are tongue in cheek and should be taken as such.
There does have to be some sensibility in the items you are willing to pay for, not everyone is made of gold and can afford $3k for new heating upfront. These things all need to be taken into consideration.
JacM is not as heartless as she makes out, having multiple properties does make you think differently about where the money goes and when.
Let's keep the conversation flowing and not turn this into whether the tenant is in the wrong, they are allowed to ask for the moon if they like!
Cheers
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeIf the tenant knew about the heating situation in a house before you moved in, they definitely can ask for an upgrade, but their rent must be increased. I would recommend you to tell them that you would install additional heat pump, but due to the pricey renovation, they have to agree to an immediate price increase. In my opinion it would be the fairest solution. However, if they disagree to the rent increase, then they just can move out.
Doesn't the tenant know that summer is coming up? Next they will complain it's too hot and want cooling in every room.
My opinion, they aren't committed to a long term lease, why should you commit to them? Like others have said they saw beforehand what they were getting into, no use whinging about it now. Tell them to sign a 12 month agreement at a higher rent to make up for the costs involved and then you will do it.
Cheers
Tom
DWolfe has a fair point – the tenant can ask for whatever they like. It is up to the landlord to decide which requests to agree to, and under what circumstances.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Leave Jesus Christ out of this, his a good man.
PS very kind of you to clarify I'm a decent person Wolfey
For the record, when I take over a property, I immediately send in the plumber and sparky to health check the place, service all the taps, re-silicone things, check the toilet works well, check on stormwater drainage, check integrity of the electrics, install powerpoints in locations where they are lacking (or provide extension leads/powerboards where it is not viable) and install safety switches. I do not charge a rental increase for such things, it is simply how I like to do business. I don't want my tenants having issues with plumbing or electrics. Having such issues is a daily nuisance for tenants. In cases where there is no security door, that gets installed too. Anything extra has to be considered, however I am a big believer in understanding your customer. I ask up front "what's annoying about this place?" If it is a low cost thing that makes the tenant happy, I do it. If it is a safety thing, I do it. If it is a "hey I'd really like airconditioning to be installed" or other expensive thing, I think about it a bit, and weigh up whether I need to increase the rent as a result of such an improvement.
That's how I run my ship. Some like to avoid ever paying for any repairs at all. Some are happy to comply with all requests and not put the rent up. Each to their own.
I find that my tenants are very pleased to have a place to live where they are never having to beg for months on end that some plumbing or electrical issue get fixed. They all know from experience what it is like to live in a property that does not get maintained and they don't want to go back to such living. In return, it is well understood that in order to live in one of my places, paying rent is not optional, it is the tenant's part of the bargain to uphold.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Jac also buys her tenants Christmas presents !
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