Bought a duplex with month to month tenants

4 Replies

So I just got a duplex fully rented but they both are on a month to month.  Can anyone give me some advice about what paperwork I should have them sign when I take over the property?  Oh...this is my first rental ;)

Erin, 

Are you planning to manage the property yourself? If yes, are you planning to use month to month or would you prefer typical lease terms?

Is this typical in your market or typical in the subsection of your market?

Me personally I like normal lease terms and make month to month significantly cost more so there is an incentive to sign a lease. Understanding you are taking this over what do you want?

Originally posted by @Erin Tarantino :

So I just got a duplex fully rented but they both are on a month to month.  Can anyone give me some advice about what paperwork I should have them sign when I take over the property?  Oh...this is my first rental ;)

 Find out if you only have to give them 30 days notice for any changes.  In CA, if they've lived in the unit for a year or longer, some notices have to be 60 days.  Also, in CA if you raise the rent more than 10% there are different notice timelines.  So, I'd suggest you find out your notice requirements.

The owner I worked for only used month-to-month agreements. At first I fought him on this, but he was right.  They're great for when you want to get rid of a problem tenant.  You can just give 30 days notice (normally) for changing any rules if any problems arise, and raise the rent, etc., without having to wait until the end of a lease.

So, I'd suggest you just have them sign a new month-to-month agreement to start with.  See how it goes, knowing you can adjust any problems with a notice, and you can kick them out with just a 30/60 day notice, if you want to.  It would give you some flexibility until you get comfortable with the property and the tenants.

Plus, in reality, a tenant will break a lease if they have to.  So, even if you would rather not have tenants move out in November, when it's difficult to re-rent until the holidays are over, if that tenant really needs to move out in November, they'll just break their lease.  So, in my opinion, leases are not a guarantee you'll keep your place rented for the duration of the lease.  And like I said, if you end up with a tenant you'd rather get rid of, it's much easier with a month-to-month agreement.

Congrats on your rental!

Thanks for your feedback, I really appreciate it.  I think I will just have them sign a new month-to-month they both have been there a long time.

Originally posted by @Erin Tarantino :

Thanks for your feedback, I really appreciate it.  I think I will just have them sign a new month-to-month they both have been there a long time.

Congratulations on your purchase and welcome to Bigger Pockets!

We prefer month-to-month as well. Our longest term tenant has lived in the same apartment 26 years. For us, the longer term leases seem to benefit the tenant more than us. If we need to make changes to the terms of the rental agreement we have more flexibility to do so with MTM and we don't need to deal with a lease renewal process.

Since you are a new investor and landlord, I recommend reading "The ABCs of Real Estate Investing by Ken McElroy and "Landlording" by Leigh Robinson. 

Also, join your local rental association to network with other landlords who will keep you up to date on changes in landlord-tenant law and share their tips and strategies with you. 

The BP Landlord forum has many valuable discussions. Use the "search the site feature" to zero in on the answers to questions you might have that have already generated some good discussion.

Happy Investing and Happy Landlording!

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