It can make sense in some situations to reduce or even eliminate a tenant’s rent in exchange for work the tenant does around the property. For example, the tenant could mow, perform plumbing repairs or remove wallpaper off.
However, does such an arrangement really make sense?
The argument for “no”
There is a lot in the “no” category. For one thing, the tenant might need specialized training or even either licensing or insurance for certain activities. If something were to happen to the tenant, other residents or the property itself, you could end up on the hook. Such an arrangement can also make for more paperwork, accounting and tracking. For example, you would have to report the work as barter income on your taxes and verify that the work was satisfactory. Your lease would need to be revised, and you and the tenant would have to agree on the value of the work to be done. And what if the tenant is on vacation a lot?
It could also be that your tenant always pays rent on time, and you would rather not lose that security and predictability.
The argument for “yes”
On the other hand, you may be leaning toward “yes.” Perhaps you know that your tenant is steady and reliable and is a whiz at making repairs or whatever it is you need doing. So, training or insurance would not be an issue. Maybe you already pay too much money to an outside contractor for the work the tenant would be doing, so the situation would save you a lot of cash. It can also be helpful to have a renter on-site who has a vested interest in maintaining or improving the property.
Also, maybe your tenant is someone who is regularly late with rent payments or misses the occasional month altogether. Having him or her do work could be a creative way to meet in the middle.
Yes, it can be risky to reduce or eliminate rent for a tenant in exchange for work. To maximize your chances of this being successful, it can help to meet with a lawyer for an update to the lease.
