Fixing up Units with Existing Tenants?

Question

Hi All, I'm buying a double which currently has two, seemingly good, long term tenants (the upper unit has been there for 9 years and the lower for 4). The apartments look they it's been a while since they've had a fresh coat of paint or new carpets, and although I'm not looking to remodel anything, I'm curious, beyond fixing any glaring issues, how much rehabbing of the units would you recommend?

I'm torn, because A.) I don't want the tenants to see me too eager to please their every whim and B.) I'm not looking to spend a whole bunch on money on fixing it up. But at the same time, I don't think its unreasonable for them to ask for minor improvements like fresh paint or whatever since the place is kind of dingy and I'd like to have an amiable relationship with these people.

I was thinking maybe wait a few months, wait for some cash to flow and then put some of that rent money back into the units, this way they understand I'm not made of money that can be thrown around making everything perfect, and by waiting a few month I won't come across that too eager to make them happy by immediately jumping in and fixing stuff up.

Any thoughts?

Greg Scott · Answer

Different Greg S here...

Turnover costs are $$ killers.  If you have long-term tenants that would like to stay forever, they are GOLD.    Let them stay.

One question I have that did not seem to be answered in this thread is, when is their lease up?  That is the ideal time to have that conversation.   And, it can be a nice give-take.  You can offer new carpeting / paint if you get a small rent increase.  (Helpful hint:  If you want them to really own living there give them a handful of options to choose from for their carpet and paint.  I have heard stories from other landlords that tenants would continue to renew because they just loved "their" carpet.)

If these tenants are on a month-to-month, you can have that conversation immediately, then put them on a yearly lease.  Even better, you can use it as a chance to re-screen the tenants for criminal background, assuming the prior landlord didn't.   Wouldn't it be good to know you don't have a convicted ax-murderer living in your unit!?

If you do it right, you can have higher rents, happier tenants, and lower turnover.

Thomas S. · Answer

If they don't like the place they can leave. That will give you an opportunity to do some sprucing up and then raise the rents for the new tenants.

If they choose to stay then leave it well enough alone as they don't really care.

Cole Ranze · Answer

The fact that the place hasnt been spruced up in many years was a fact that the one tenant pointed out several times when we first saw the place, which is kind of what prompted me to ask.  Obviously if they'd been there for years and didn't see a need I wouldn't make it an issue.

Thomas S. · Answer

Wait till they leave before doing any sprucing up. It is not necessary to show the tenants you are putting money back into a unit you just need to be prompt with repairs.

Tim Lindstrom · Answer

I bought a property with a tenant who had been there 8 years.  It could use new carpeting, and some paint, but I'm not going to touch those unless he asks.  I did however replace the stove and dishwasher, which were not fully operational, when I bought the place.

Jassem A. · Answer

If they complain about it or it's an emergency like a plumbing problem or roof leak then I'd do something.  If not then they could be perfectly happy with their unit and it might be more sensible to wait until they vacate.