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Old 08-20-2010, 08:13 PM
 
Location: Maine
2,192 posts, read 3,406,170 times
Reputation: 2292

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We own a home that has been empty for about 2 years. It needs some work but is certainly livable now. We want to sell eventually but not now (we are way upside down on it.) In order to sell it for what we owe, we do need some work done (lots of paint, some roofing, and some better finish work.)

We are meeting a contractor who is interested in living there with his girlfriend in exchange for work. Has anyone ever had this arrangement before, either as owner or as tenant?

I imagine we would first determine a fair rental rate per month, then he will give us a price for each project. We'll go and check on the house every month to see that the projects are being done to our satisfaction.

Any advice?
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Old 08-21-2010, 08:50 AM
 
15,628 posts, read 20,745,172 times
Reputation: 6621
I never have done it but heard of the stories how things got wrong....I would not recommend any one to do this.

Just make a rental amount and put it in writing. Get an estimate for the work from an outside contractor and one from your tenant and go with the best one, but still what are you gonna do when the tenant messes up with the work and the quality is bad....

To me mixing renting and this is setting your self up for a big dissapointment and legal issues...
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Old 08-21-2010, 12:40 PM
 
Location: Apple Valley Calif
7,376 posts, read 11,783,586 times
Reputation: 4974
I allowed a self proclaimed handyman live in a rental for a reduced rate. It turned into a disaster and ended up costing me a lot of money to rectify.
It was an out of state rental that was handled by a Property Manager. The PM didn't due their job and keep a close eye on the progress. The renter was a local police officer, so the PM thought they could believe everything he said without checking on him.
The way I discovered the problems was, I decided to see about selling the property, so I had a realtor stop by and see what the value of the place was. She sent me dozens of pictures that showed the home was in terrible condition. Many half finished projects, and most of the little he did do was terrible and had to be redone. I evicted the renter and sued the PM company.
The property took months of work and lots of dollars to get it ready to rent again.
What I learned was exactly what the above posted said, make him pay the rent, and you pay him for his services. ...and keep a VERY close eye on him to make sure you are receiving quality work for your money.
There are lots of bad people out there just waiting to take advantage of soft hearted people.
Your rental is a business, treat it as such. There is no place for nice guys in business...!!!
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Old 08-21-2010, 01:00 PM
 
14,029 posts, read 25,855,451 times
Reputation: 8188
I would only consider a licensed contractor in the Trade where you need work...

Keep the rental and work separate... the last you want to do is be an employer.

The only time I've know this to work is when my brother rented a home to drywall/painting contractor.

He was going through a bad divorce and needed a place to stay...

He was there 3 years and home came out gorgeous... and my brother benefited by collecting rent the whole time the renovations were being done.

The guy's brother was a licensed plumber and separately, both bathrooms were redone with permits.

In 30 years, this is the only time I personally know where it has worked.
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Old 08-21-2010, 04:08 PM
 
Location: Maine
2,192 posts, read 3,406,170 times
Reputation: 2292
Good advice, all, thanks. I will see if he is licensed. There is nothing saying we'll go forward with this idea, and you've given me lots to think about.
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Old 08-22-2010, 06:31 PM
 
1 posts, read 15,644 times
Reputation: 13
Default Not Good!

I did that once, and it was never as I had expected it to be, even though he was a contractor with all the skills. We switched to rental agreement , and he never paid and I had to take him to court! Never did get my work or my money.
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Old 08-22-2010, 10:23 PM
 
Location: Chciago
721 posts, read 1,559,270 times
Reputation: 441
If you've seen this guys work before I would maybe consider it but having hired random people off craigslist before sometimes you find a perfectionist who does great work and other times you find a guy who claims he can do everything and cant even hook up a bathroom sink.

Then you run into that age old joke about how everything gets done but the contractors house, may be especially ture when its not even a house he owns just one he's renting for cheap.

I think it will just be overly confusing trying to figure out a fair rent amount plus what each job is worth, I think someoen eithe ryou or him will feel they are getting cheated. Also how will you price the jobs he does, same way he would price them for anyone else or cheaper b/c your kinda cutting him a break and he can work on his own schedule?.
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Old 08-23-2010, 12:11 PM
 
Location: Boise, ID
5,472 posts, read 10,626,082 times
Reputation: 4855
I would agree, he needs to be licensed, registered AND INSURED as a contractor. I would handle the rent and the work separately. And I would require him to sign an independent contractor agreement, stating that he knows that he is not an employee, and is responsible for his own business, including insurance, record keeping and taxes.

If you do a "work in exchange for rent" deal, and you run out of work, is he going to expect to live there for free forever?

We had a handyman rent from us for several years. He kept his place in the best shape of any property on the street, inside and out, and we paid him separately for fixit work he did for us on our other rental properties. It CAN work, but it can also easily go very very wrong.
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Old 08-23-2010, 12:41 PM
 
Location: Little Pond Farm
543 posts, read 790,080 times
Reputation: 457
Don't do it!!!!!!!!!!!!!
I did and it cost me thousands of dollars, three trips to court and lots of stress. The people did no work or what they did was halfassed done and horrible. Gave them 3 days notice as outlined in the agreement to vacate. They weren't around after the three days so I figured they left, changed the locks which cost me 300.00 + and then ended up in court for an illegal lock out three days later. The Judge said it was a lease agreement even though objectives, responsibilities were outlined (ie paint first floor week one but this was VERY DETAILED on what and when work was supposed to be done) as well as consequences if the work was not done. These people were suspected dealing heroin out of my home the Police raided them once, they screwed my doors shut, they left the ovens on 500 resulting in a 280.00 electric bill I was stuck with, they emptied the water holding tank in the basement worse is.............get this...... the Judge still made me give them extra time to get out. Oh and guess what, a month after they are gong, my plumbing on the 2nd floor is all clogged. I'm wondering if their stash made it into the toilet and now is blocking the pipes. I take full responsibility of walking around with Idiot on my forehead because I believed this chicks sob story (they were burnt out of a home they rented and were living in a motel room with a baby) because I knew this girl years ago. I found paperwork they left around when the house was supposed to be ready for a realtors open house which sent me into a frenzy. Court documents......... This infant child was taken from them because of drug use and possible sexual assault on a infant child. A quick Google search on the chicks name returned disturbing results. Apparently she was convicted of animal cruelty for leaving 14 animals in a home she rented for 3 weeks with no food or water resulting in the death of 9 of them. She was also on probation for stealing someones wedding ring and pawing it as a way to say thanks to her friend for letting her stay there.
It is very sad that a situation that could help all involved ends up a trip to heck!
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Old 12-02-2010, 02:24 PM
 
Location: Livingston, MT
10 posts, read 30,780 times
Reputation: 17
Unhappy Predjudice

I understand there are irresponsible people in the world. I have in fact dealt with a few while owning a home. But not everyone is a crook or incompetent. For those of us who are the opposite we are harmed by the few. Someone does us wrong and we prejudice ourselves against everyone else. I and my daughter would love such an opportunity, but we are overlooked because of a few bad apples.

Sorry but not all of us are the same, due diligence is fine but blanket prejudice is not.



Quote:
Originally Posted by lawmom View Post
We own a home that has been empty for about 2 years. It needs some work but is certainly livable now. We want to sell eventually but not now (we are way upside down on it.) In order to sell it for what we owe, we do need some work done (lots of paint, some roofing, and some better finish work.)

We are meeting a contractor who is interested in living there with his girlfriend in exchange for work. Has anyone ever had this arrangement before, either as owner or as tenant?

I imagine we would first determine a fair rental rate per month, then he will give us a price for each project. We'll go and check on the house every month to see that the projects are being done to our satisfaction.

Any advice?
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