Tenant Requesting New Carpet Due to Allergies

Hello property investors,

I received a phone call from my property manager a few days ago regarding a request from the tenant living my rental property. The property manager told me that the kids of the tenant had become sick over the last few months and long story short, had found out that it was the carpet in the property causing their young children to experience allergies. This tenant has been living in the property for the past 3 years and this is their first time complaining of such allergies. There are tiles throughout the residence and only carpet in the bedrooms.

So the property manager is now telling me that because of such health issues, the tenant has requested that I change the carpet to something non allergenic, otherwise they are saying that they will move out. In general these tenants have been quite good, they generally look after the place, pay their rent on time and only issue about 1 maintenance request per year.

I have been trying to weigh up the pros and cons of each option and have decided that from a property value viewpoint the best way forward may be to actually agree to their request and to simply change to a different surface either hypoallergenic carpet or even use some kind of floorboard as 1) the existing carpet is about 12 years old now and 2) possibly may increase the value of the property as a rental for future tenants. The other thing I was considering was that not many tenants would be agreeable to have renovation being done whilst they were living in a property and doing it like this would allow the rent to still be coming in whilst the property is being improved.

On the other hand, I am pretty certain the tenants would object to any rent increase (fixed lease ends in September 2015) as they have indicated in the past that they are at their financial limit in terms of the rent they are paying. The problem is that the market has moved since their last lease signing and the market rent is at least 10-20 dollars per week higher than their current rent, at the same time however, it will be spring time and the vacancy rate is at 2% so I'm wondering if it is worth the gamble of replacing the carpet and increasing the rent.

I'm wondering, what do you guys think would be the best course of action in this situation?

 

I remember speaking to a few PM's servicing the 2770 postcode and they all stated that there preference was for no carpet in any of their rental properties due to allergies.

In your case, you need to weigh up the situation:

- Is the carpet past its use by date

- What does the the majority of the market want (carpet or hard coverings)

- What will its replacement be if any

- What will the replacements costs be

- Will the expenditure bring an increase of rent

Take out the the tenancy from your decision making to ensure that you are doing the best for the property. If the tenant walks and there is a demand for your property why would you be concerned. If the market was flat and you needed to keep the tenants, this would be a different answer.

 

Funny I had exactly the same thing happen about 2 years ago (not in Mt Druitt is it?).
The tenant moved in to the house straight after a full reno. So everything was new. She wanted floating floorboards put through. As the carpet was only 2 years old we said no way. She moved out. No big deal.
If the carpet is old I'd consider changing it but with an increase. Why spend money for nothing if you can get more rent? There is the changeover cost but if rents are rising then you'll lose her soon anyway as rents go up. Sydney is due for some rent rises.

 

I agree with Wylie, however my 1st thought was if it were my little one (in their shoes).

I don't or eventually wont have any carpets through my places, tenants can use rugs/mats etc if they like (as I I do in my own home) depending on val dictates quality/cost of durable flooring installed.

 

I would say sure you can have it but you pay for it.

Play hard ball with them hotmail, it's not cheap or easy to move especially when they have kids. 1k of carpet or move? I know which I would choose.

 

Couldn't agree more. Hotmail is it an easy area to get tenants quickly? What if you replace it and these allergies still exist?

 

Change it with the likes of floating floorboards maybe.
And increase the rent at the end of fixed term - September 2015 is not long way away. If they can't pay for it then they can move out and you can list it for market rent.

 

From what you are saying I would offer them to sign a new fixed lease now to commence from sept at the market rent or close to it in exchange for new carpets/floorboards.

 

Agree with this. If it really is market rent, then the tenants don't really have much to stand on in terms of arguing it.

 

Do you have floorboards underneath? In order to accommodate your tenants request, if you ripped up the carpet it would throw a lot of dust.
Would they sign a new lease with a rent increase that paid for the removal? And polishing the floorboards? Would it improve your house's desirability/ rentability?
Given that allergies are 'on the increase, would it be a good plan for you?
just a few thoughts,
I hope this helps

 

One thing that no one seems to have queried in this is whether the carpets just need a good, deep clean... this might go a long way to mitigating the problem.

 

^ ^ this! Carpet does not cause allergies in most cases it is the dust, dirt and dead skin and associated bugs that feed on this that is the cause.
Sounds like the tenant needs a decent (expensive) vacuum cleaner.

 

Agreed, it's usually dust etc.

In saying that, if the carpet is 12 years old it might be due for replacement shortly anyway - so a win/win might be to say that you'll replace with floating floors (or something) for a $10-$15 increase providing they sign a new 12m lease.

You add value, without any vacancy, get a rent increase and secure good tenants for another 12 months.

 

I would change it but with a rent increase. I'm sure there are plenty of people willing to pay if they aren't. $10 a week is fair. If they were to find somewhere to rent without carpet they would need to pay extra rent and pay removalists so it wouldn't be worth it for them to move.

Or in the flip side you can offer them a rent reduction for a certain amount if time if they want to install carpet themselves.

 

Lease expires in September - time to draft/ submit the rent review. If they want to walk, they will.

Offer the new lease with the works to be undertaken by the lessor (@ the proposed higher rent).

What are they allergic to? (Work? ) or I shouldn't be so cynical when I check the postcode.

 

Hey guys, appreciate everyone's input. Sorry for the late reply, been mulling the situation over and speaking with the property manager and even attended an extra inspection with the property manager to take some photos.

At this point I think I agree with the majority opinion which seems to be to install either floorboards/carpet, keep the tenant and possibly nudge the rent up slightly by 10 dollars per week for the new lease. Hopefully they won't move out because of this as they've said in the past that the current rent would be the "highest" they could afford to pay. On top of this they are saying that they are happy to pay for the new blinds that they need, so I though that was a nice gesture.

I'm leaning toward installing some floorboards at this stage because even though they cost probably a few thousand more compared to low maintenance carpets, it may give the apartment a higher valuation in the future. This is particularly considering the Sydney market booming at the moment, the dollars spent may provide a higher return on investment. Additionally, I've discovered that a lot of the other lots in the building all have floorboards and some of them installed years ago. Finally, I think I should take advantage of the fact that the tenants are willing to live in (and therefore I am getting rent) whilst the renovation is taking place which I'd imagine would be rare if the property was vacant for example, I'd have to complete the renovation before even advertising for a tenant.

I think the combination of the above factors are quite compelling in reply to @thatbum , @The Dark Knight @Biz

I will post some photos of the carpet tonight, currently in the process of investigating getting people to come around for floorboard quotes and which type of wood/material. I'd imagine that I'd have to rip out the existing carpet, it is the original carpet from when the apartment was built back in 2002, so it has been in service for about 12 years now. I think it may have been professionally cleaned back in 2008 but nothing since then.

@Propertunity , @Kirk Stafford , @Lil Skater
I'm just not sure if the tenants would be happy with just doing a clean and one of the property managers told me that every 7-10 years is a good time to replace the carpet anyway.

@Pistonbroke , the postcode is 2141. Just been looking at the vacancy rate and competition rentals there seem to be only 7 ads on realestate.com for rentals in that suburb and some of them are in a lot worse location in terms of closeness to the main shops and transit of the area.

Thanks again

 

Dead centre of Sydney

 

12 year old carpet...

What is the consensus here? Personally I consider carpet a consumable and wouldn't expect to raise rent for replacing such an old carpet. Just part of maintaining the property isn't it? Maybe I am off base?