I haven't used it, but, Jeffrey's method might be the perfect method for you. (Jeffrey is Mr. Landlord, creator of this site.)

Basically, you send a letter asking how much they can afford. There is much more too it than that, I'm thinking a search of Rent increase letter on this forum might give you results.

I am not trying to be rude, but of course you should have thought about that when you first rented to them for $1200. The appropriate calculation would have been $1600-$1650 minus the value of the work that hey were to do. In that case, it would have been clear that the price would go back up to $1600-$1650 plus whatever increase would be appropriate for 2019.

Don't be a chump--- Good job?

I've had numerous failures trying to do this. Everything from poor work to just not doing the work at all.

Since I usually buy class C places that need work, almost always the tenants want to trade work for rent.

My new way to try this is they pay full rent and I will refund the value of the work AFTER it is complete and checked. The quality required is agreed on in advance as well as a timetable for completion.

Precarious situation. Not typically a good way to start LL/T relationship. How much did they spend on average each month for the year they were there? Are they done working? If it was $200-$300 a month, you could approach that as an increase or half that or whatever. Now that they are done putting money into it.

I can almost guarantee now what will happen is they will fire back at the rent increase with something like "But we did all this work, why are you raising our rent?"

Now you see the mistake you made that put you in this position, by agreeing to $1200.

They did some work, enjoyed reduced rent, and without any calculations whether the compensation was accurate or not, this deal is over.

Now you start a new chapter. Raise to rent to 90% of market rent, in your case here to around $1450, telling them that their discount is for them being 'good tenants'.

Melinda,

Count me in with fred and Moshe. You gave the discount for a property that needed work, you basically paid them $4800 (12 x $400 discount).

You don't owe them any more special favors. You did them a favor and now we're on to Part 2.

Now the house is MARKET READY and rent should be market rent, back up to your $1600.

They are expecting that. They knew the discount was for the work, the work is done.

If they move out what would the rent be? Same as is they stay.

Don't be shy. Gotta be strong ans stand up for your business.

Letter: 'Joe, now that the repairs are complete the rent will be $1600 starting Feb 1."

I have tried this Work for Rent method several times and only ONCE has it worked. I calculated the labor cost to hire it out, reduced the rent for 90 days to match the labor amount, the lease says the rent goes to the normal rent after the 90 day period.

A good freind just lost her rental doing this. The applicant talked her into reduced rent to replace the failing septic system "My Dad installed these". Well nobody fixed anything, the house was condemned due to failed septic, and she did not have the $10K for a new one, partly because she had given them reduced rent for a year.

In the future I suggest a lease for the full amount then a discount on the rent for work completed based on a written, agreed amount.

Well, I am very surprised that no one has chimed in about the Mr. landlord rent increase letter. I thought some of y’all used that.

It doesn’t surprise me that this bunch seems to think you did a terrible thing letting someone fix up. The inter webs are full of stories where landlords, other business persons, extended a hand, and all they got for their troubles was rabies.

But, clearly, you DID get a good result. I offer congratulations on that.

Melinda, I did some looking on the Mr. Landlord site, Jeffrey offers packages of forms, training, but, my old eyes were getting blurry. I dodn’t Spot the rent increase letter, but, I am quite sure that it’s Jeffrey Taylor that uses this.

You had good success with this tenant and the repairs, so, either: you were extremely lucky, or, more likely, you have some good management skills. You recognized that this tenant was likely to follow through, so you hired them. And, during the year, you coached/ supported them in whatever fashion, and the job got done. Good management.

The rent increase letter I am speaking about basically says, market rate is this, what can you pay? Or, something to that effect. Because you know how to manage, you have a tenant that deals fairly, this could be a very good win for you.

Melinda,

Is there a reason you are being shy about this? Didn't you expect the rent to go to normal once the repairs were complete?

Not that you can go back in time and correct it, but in the future - set year two rent when you are filling out year one lease.

Both side will be happier if they know what to expect.