User Question: Should I allow the tenant to do work on my rental property and reduce their rent for the work performed?

To Erik A. in Pennsylvania:

Unless the tenant is a licensed contractor who is insured, NO, you should not allow the tenant to do any work over and above the lease-defined responsibilities (yard work, snow removal from steps and sidewalk and minor repairs, etc.). Many municipalities require permits/inspections for much of the work performed to a rental property. They often require that only licensed and insured contractors perform this work. You also do not want to reduce the rent for work performed because you will need a valid receipt in order to list the work as an expense or capital improvement in order to be able to depreciate it for tax purposes. Receipts are necessary to document the work performed. I note all my receipts for the property it was performed on and save the receipts in a box for tax time where it is retrieved and collated with other receipts for each property. I have heard of some landlords “looking around” Home Depot/Lowes or other home improvement stores for discarded receipts that they can use for their properties but I don’t recommend this practice. At tax time, I go through my box of receipts, mark a number on each receipt, list them as an expense or capital improvement, and log the receipt by number on a spreadsheet. I then collate all the receipts for a given property/type of receipt and list/summarize them together so that I can enter them appropriately on my tax forms for that property.

I also keep a list of qualified contractors to utilize when I need them.

In summary, I strongly suggest that you not use a tenant to perform any work unless specifically defined within your lease.

For further information, consider purchasing my book. You can find further information in the book at:

Chapter 3

• Pre-requisites
• Local and County Regulations