Most tenants are afraid to ask their landlord for upgrades, as these tend to lead to rent increases. While this is true, you shouldn’t get too stressed, as living in a crappy apartment that you have to move out of often costs even more than living in a well-maintained apartment.
When a tenant asks me to upgrade his apartment, there are two basic questions that I ask myself:
- Do I need to do this?
- Can I charge more rent for it?
This gives me five possible answers to the tenant ranging from “right away sir” to “over my dead body." Here’s how I decide:
1. Yes, and I'm happy to pay out of pocket:
Not all landlords are skinflints. If something needs to be done, or it seems like a good idea, I’ll generally pay for it out of pocket-- this is just good tenant relations. In general, I’ll pay for necessary repairs or replacements that make my apartments nicer than the cheapest generic rental units-- I’ll spend the extra $100 on an "owner grade" stove, use high quality paints, buy windows that seal well, etc.
- Investments in energy efficiency that aren’t economically efficient, but improve the tenants’ lives. I insulated my hot water pipes, and installed a water circulator on a timer. The result is that tenants get hot water instantly, and I can run the hot water heater at a slightly lower temperature, prolonging its life.
- Low-cost improvements that make the tenants happy: new toilet seats, shower bars, hotel-style clotheslines.
- Long-term infrastructure upgrades, like new gas, Ethernet, water, and sewer lines, central a/c, etc., as part of a larger project. Over the long term, these are necessary to keep my property positioned in the solid middle of the market.
2. Yes, but your rent will go up:
These are the kinds of improvements that upgrade an apartment to a higher quality. I’ll do these upgrades if the tenant promises to contribute, and if I think that the upgrade can be justified in terms of increased rent if the current tenant leaves.
This also applies to virtually everything in a rent regulated apartment: Since rents increase slower than costs, I try to make up some of that through periodic apartment upgrades performed with the tenant's consent.
These types of upgrades include:
- High speed internet access
- Bulk vegetable purchases through a Community Shared Agriculture membership
- Upgraded bathroom vanities
- Ceiling fans
- Upgraded lighting
- Dishwashers, granite countertops, and high-end kitchen appliances
- Anything better than the absolute cheapest used appliance in a rent regulated apartment
- Any voluntary construction in a rent regulated apartment. What you see is what you get, and if you want better, you have to pay for it.
3. You pay for it:
There are some upgrades that I won’t fund, either because I don’t feel like dealing with the installation, or the property is portable, or because the upgrade appeals only to the current tenant:
- Chandeliers and other custom lighting
- Custom built-ins in the closet
- Additional electric outlets
- Custom faucets or other non-necessary kitchen or bathroom upgrades
- Room dividers
- Window treatments
4. No way:
Some things aren’t worth having at any price, either because they are dangerous, or because they’d annoy me, or because they aren’t in my long-term interest.
- Custom paint jobs in dark colors
- Washing machines over living spaces (wet over dry)
- Cut-outs for a/c units, or anything else that goes through the wall
- Basically anything in a rent regulated apartment that the tenant won’t pay for.
5. Pay for your it yourself, and avoid an increase in rent:
Every tenant worries that if he invests his money and allows his landlord upgrade the apartment, the landlord will turn around and jack the rent up.
To prevent this, a deal like the following may make sense if you trust your landlord: A $6,000 project, funded by the tenant, might be amortized over 60 months, so the tenant will get a $100 credit every month regardless of whether he still lives there. This way even if the tenant moves, he’ll still get reimbursed, either through lower rent or through a check delivered to his new landlord.
If there’s some upgrade that you want, talk to your landlord. Unless it is unrealistic, extremely expensive, prohibited, or otherwise unusually difficult, many small landlords will be happy to oblige.