First Multifamily - What to do with existing tenants

[Jim Hudson]

Hi,

After a year of research and multiple offers, I believe I am closing on a 2 family in Connecticut in January 26. I am super excited and plan to “house hack” for a year or two since the property needs renovations.

I am reading Managing Rental Properties by Heather and Brandon Turner this weekend and I’m confident this will help answer some broader questions. I have a lot of local resources to bounce things off as well. 

I need some advice with how I might consider handing a tough situation (for me at least) with existing second floor tenants. The tenants would like to renew according to the listing agent and are willing to pay market rent. Let’s assume this is true for this discussion. The second unit is mostly updated, and aside from the carpet which I would love to remove, doesn’t need much work. I still plan to refresh the unit because my ultimate plan is to live on the second floor. However for now I plan to move into the first floor and renovate that, plus take the ceiling down for some repairs and sound insulation.

My main question is how you might suggest dealing with a problem. The tenants are neat, but they have two cats. When I toured the property the second floor smelled horrendous. Even the basement smelt bad from the cat smell in the HVAC. Part of the problem is the litter boxes were not cleaned out and smelt like… number two… The second problem was the carpet isn’t helping the situation since the cats track that litter box smell around. And the final problem is the litter box was located right by a hvac return.


I am very hesitant to directly address the smell because of horror stories I’ve heard with “ESAs”. If I hit the issue head on I worry they could leverage me later if I try to get them out saying I’m discriminating on the ESA status. I simply am not - I am fine with pets or ESAs as I am required to be. I just cannot deal with smell. My friends who have cats do not have this issue but they strongly advised I discuss litterbox cleaning, remove the carpet, and clean the ducts.


Their lease expires in 2 months. What would you suggest? My initial reaction was to come in, meet them, and give them a list of maintenance I’d like to do including hvac cleaning. Then have the hvac guy who I know well make casual reference to the fact the litter boxes should not be near the ducts. Then perhaps I can discuss their interest level in me removing carpet or at the very least cleaning it professionally.


The property location is a relatively upscale area and getting nicer. I plan to make the unit on the middle to upper end finishes scale, including removing carpet. It seems that I could have that done while they occupy the unit with a little creativity.

Any and all advice will be appreciated!