Inheriting Tenants - How to handle leases

[Samuel DeMass]

Hey BP,

I'm in the process of buying a 4-plex with tenants currently in place.

I have a great property management team in place ready to take over the property when the deal closes, but I'm curious about what will or should happen to the current leases and how the transition will go.  #AskBP

What, if any, suggestions would you have for the transition of tenants to my property management?

-Sam

[Che Chiu Wong]

When I inherit the tenants, I always sign a new lease with my tenants.  That way it becomes consistent with my other tenants, with the same rights etc. etc. (My lease specifically says any prior lease is null and void).

A key point is to keep the rent the same as whatever they pay prior (if rent is reasonable).  Usually this is the part that the tenants are most concerned about.  You, as a landlord, are concerned about numbers, but definitely beyond that. That's why you should always strive for using your own lease (rather than some inherited lease) if possible.