Most ethical way to not renew a month to month lease when the tenants have perfect track records

[Josh P.]

I'm buying a new property. I'm remodeling the units and turning them into corporate rentals. All current tenants are on month to month leases.

How do I not renew the month to month leases for these good tenants? I thought about giving them each 2 months notice and then paying their moving expenses or something along those lines. How do I do this ethically?

[Mark Updegraff]

So the corporation will be paying more?
IMO long term tenants are as attractive as corporate tenants because of the reduced turnover and costs associated with freshening up. Also, they are much less likely to cause damage. People that are not paying the bill have no reason to keep the place in shape, and often cause undue damages, theft, etc. They also tend to party more, speeding up the normal "wear and tear" abuse.

That said, why offer any concessions for giving the boot? After all, it is your property and your investment. If their rental rate is not providing for an adequate CF...

You COULD give them the option staying in the unit, provided the pay the same rate the corporation will be paying.

2 months should be adequate notice, but they will complain no matter what. So, once you make a decision, stick with it. You'll get plenty of stories about how they're looking, but nothing is available... blah blah blah. Most of the time they're not even looking! I monitor the rentals in the area, so when they play that card I start asking, "did you look at the house on XYZ street that is renting for $600?" ... Of course, they must have missed that one.

You're running a business, treat it like one :D

Cheers,
Mark