It is not an easily answered question – there are pros and cons, advantages, and risks. So, let’s discuss it, but before we start, we need to make one item very clear.  

“The subject of improvements must be clearly defined in the lease.” 

Some property owners forbid it outright. They prefer to take care of all improvements whether they tackle it themselves or hire a professional. But, if you are willing to consider allowing tenant-propelled improvements, you need to lay out precise guidelines –the first being that the tenant must attain written permission before any improvements by tenants happen.  

Be specific about what is considered improvements. For example, some tenants think painting their child’s bedroom ceiling blue with glow-in-the-dark stars is free game.  

You must also be specific about who pays for what. Whether you are making an improvement, which the tenant requested, or allowing them to tackle it, improvements that aren’t necessary to keep the rental in habitable condition can be designated as the tenant’s responsibility in the lease. For example, say the rental was freshly painted before the tenants moved in, and three months later, they want to paint the living room. You are agreeable to letting them paint it, and you are satisfied with the color they chose, but the walls did not need a new coat of paint, and the color change will not raise the rental’s value. In this case, it is fair for the tenant to foot the bill for the paint. On the other hand, if the tenants had been there for a couple of years and the room needed a fresh coat of paint, it’s appropriate for you to cover the cost. 

The lease should also specify what happens if the tenant (with or without permission) makes changes that cause the property value to drop. Finally, the lease should clarify that all improvements become part of the property and remain when the tenant vacates. 

So, back to the original question – should you let your tenant make the improvements? Most often, it is a case-by-case decision. However, the answers to the following question will help you decide. 

Questions to ask yourself: 

• • • Will the improvement increase the value of your property? 
    • Even if it doesn’t necessarily increase the value, will it increase the tenant’s chances of staying longer? 
    • Does your tenant have any experience with doing the type of improvement requested? 
    • Can they provide evidence of their knowledge and skill?  
    • Do they have a timetable for completion, and what happens if it drags on and on? 
    • If something goes awry or they start but never finish, how easy will it be to restore your property to its best condition? 
    • Will their damage security deposit cover the cost of undoing an improvement gone bad? 
    • Do their choices of paint, their style of renovation coincide with what your try to maintain in your properties?  
    • Will the next renter be happy with it, or will you have to paint over it, undo it, etc.? 
    • Are they asking you to pay for supplies? 
    • If they are paying, are they using a high enough quality? 

Questions to ask your tenant: 

• • • What exactly do they want to do? Expect a detailed plan. 
    • Can they meet your expectation on time to complete the project? 
    • What experience do they have in the type of renovation they plan? 
    • How committed are they to continue renting the property? 

The answers to the above questions will guide your decision. If they have proven to be dependable tenants, you have reason to believe they have the necessary skills and time, and the improvements they want to make will either maintain or improve the property’s value, then you have solid reasons to approve. However, arrange to stop in and overview the project in process –do not wait until the project is complete to inspect. 

On the other hand, if you question the potential quality of the work, you aren’t sure you can trust them to stick to the plan, or you suspect it will devalue your property, then a no is appropriate. But, even if you are declining the request to complete the improvements themselves, you may want to consider doing it yourself (or hiring it out). When an improvement helps property value and its attractiveness to the current and future tenants, it’s typically worth your investment. Rental properties need occasional upgrades. Your tenant may very well have good ideas, and responding to their requests may win a long-term renter, which saves you both cost and hassle.

About Rentals America 

Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management and we’re here to help landlords navigate the rental market.