I recently purchased a Triplex from my neighbor. He is 75 years old and ran his building "old school". You know, week to week with no lease and a 1 week security deposit.
Of the three tenants he had in there, one left when he heard of the ownership change. One tenant has been there for 20 years, and has not made one payment since I took ownership. He is currently in eviction process. We should get a court date this week.
The only tenant left actually has been paying on time. The rent is at least $40 below market. The problem I have with them is they refuse to fill out an application and they are refusing to sign my lease.
I have issued them a 30 day correct or quit eviction, but not only will I have to fight a paying tenant in court, I will have a completely empty building.
We are nearing completion of renovations on the first unit. So, I was thinking of just riding it out until I get a fresh tenant, then raise their rent considerably until they move or sign the lease.
Yes, I agree with your strategy. Do they meet your application standards (credit, income, etc.)? They've been paying. That's good. As you've indicated, rehab then raise rents. Hopefully they'll sign, but likely they will not and you'll have to turn it over to a new, higher paying tenant that meets your tenant quality standards.
I have very strict investment criteria and tenant criteria and I never buy properties already tenanted. i'd rather not inherit problems. SFRs being sold with tenants, more common than not, have problems. It's just usually not worth the risk of having to pay $5K+ to evict.
Best of luck,
40 dollars or 400? check your state laws in ohio they would automatically be on a month to month lease. so my thought would be keep them there until you finish and rent out the other units but in the mean time keep working on them maybe they will sign the lease. if not time to move along...
I'd try to work out something first and if they don't pay then evict them. Filing eviction paperwork shouldn't cost 5 grand. It's about 100 here.
The eviction will probably cost me $500. The rent is about $40/ mo. below market, so not a deal breaker for me, but I'm sure it will make a difference to them.
I guess I just don't like the idea of the tenant taking control. I figure nothing good could come of that.
then let them sign a lease for the current price. 40/month isn't major and lets you keep a stead income for the time being.
That's the problem. They won't sign anything. I have no information on them. No SS#, DOB, pic. ID... Nothing!
Evict! Probably not something you really want to do, but in this case may be your only option.
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