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Hlandyman Offer |
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Edith,
My mother has an investment property which is the first home they purchased in 1957. Since my father passed in 1999 my mother has spent $10,000 in addressing problems that were neglected. However,
we have a highly recommend handy man that is willing to do the work for exchange for his family of seven to live in while he does the work. He works for realtor consultant friend of our. Should consent to this agreement in writing? Please Advise |
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You don't tell me -- has your mother been acting as a landlord for the past nine years? If so, she should have some experience in judging prospective tenants and how to avoid problems.
First off, as an investor your mother should have her own lawyer, and that's a good person to consult at this point. She should also have a CPA, and the question of taxes should be addressed -- does she get additional cost basis for the work and get to depreciate it when she's not exactly paying for it etc. How would the retail cost of the work compare with the value of the rental?
Then I'd wonder, might the handyman stretch out the work to stretch out the free rental. And as he isn't getting any cash from your mother, what would he do with your place when other paid work came along? Then I'd wonder, what would you do if the family stalled about leaving at the end? I believe it's difficult to evict someone who isn't exactly a tenant (another question for the lawyer). And I'd make an excuse to visit them unannounced at the present dwelling to get an idea of their housekeeping before making any commitment.
I'd want a decent credit report on anyone I rented to, and I don't see why this would be any different.
If you do do it, be sure you have a written contract, drawn up by your lawyer or -- if they have a lawyer -- reviewed by your attorney.
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Edith
Originally published on August 1, 2008 |
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