Existing tenant wants to switch unit

14 Replies

in a multi family building, how do you all handle when a unit becomes vacant, another tenant wants to switch and move in?

That could be for a variety if reasons, that unit is farther from the street, or newer appliances, or the perception that they will get a free new paint job in the soon to be available unit etc...

Do you entertain such request?  You have to because they are just another applicant only you know their rental history.

But I will end up having to turn over two unis in a row so it costs me more.  Plus time, to process a new lease with a new address.  On top of that the tenant probably expects a special consideration because I know them and they know I give a preferred rent to renewals and this is not a renewal this is extra work X 2!

Thoughts?

Yeah that's kind of a tough spot to be in. If they were a really good tenant I would probably do it for them. It is more work and expense, but it may pay off in the long run if they stay for a long time. I would not provide that rent credit though that you mentioned unless I was somehow legally obligated to do so.

If it's vacant, and it would make the tenant happier then find a way both parties to benefit. 

Yeah it would cost you more to redo 2 units, but you were going to have to redo her unit when she moved anyway. Just decide what makes sense for you financially and then find a situation where both parties win. If it's a good tenant and you think she will stay a while then I think accommodating this request could be very good for you long-term. 

Originally posted by @Sam Leon :

in a multi family building, how do you all handle when a unit becomes vacant, another tenant wants to switch and move in?

That could be for a variety if reasons, that unit is farther from the street, or newer appliances, or the perception that they will get a free new paint job in the soon to be available unit etc...

Do you entertain such request?  You have to because they are just another applicant only you know their rental history.

But I will end up having to turn over two unis in a row so it costs me more.  Plus time, to process a new lease with a new address.  On top of that the tenant probably expects a special consideration because I know them and they know I give a preferred rent to renewals and this is not a renewal this is extra work X 2!

Thoughts?

 Just had this situation happened to me recently.  Short answer is no, I wouldn't entertain it.  Long answer you pretty much spelled it out.  It is not different than getting a new tenant and renovate the old one and rent it out.  The net result is that you are still getting a new tenant and an old tenant.  It is much harder to convince a tenant to move in than to stay, so might as well give the "newer" unit to that person right?

As long as the tenant has a good history of paying on time and generally not being a problem for you, I would allow it.  It would make the tenant happier, and happier tenants tend to stay longer, which means less turn over in the long run.  I would not grant any rent reductions for the switch over, and they would be paying for both apartments for the time it takes them to move into the new one- it should only take a day but maybe they want a longer overlap than that?  

We are making small upgrades every time a unit turns over, so I look at it as an opportunity to increase the rent based on the upgrade.  I would be showing the occupied apartment and lining up a new tenant before they move to minimize the time it is vacant.

I get asked all the time, my answer is always....."sorry I have already taken a deposit on it"

I was renting a studio apartment for about 9 months. I asked the landlord once a one bedroom opened up to let me know. Soon after one opened up and he was happy to let me move in. I have now been in the one bedroom for about 9 months and if he originally didn't let me move from the studio i would have surly moved on. Seems like he got a longer tenant that he knows will pay rent on time each month and i got an upgrade. Win, Win!

I do it often, and explain to them why it's expensive for the landlord to do. Charge a transfer fee so that you offset some/most of the expense, start a new lease so they are guaranteed to stay there longer, and you get the advantage of keeping a good tenant with a proven track record. And you've made them happy!  

In a multi family setting you should really have a written transfer policy so that each situation is treated the same.

I did this recently. Their old security deposit will cover any damages in the old apartment. They must pay enough to match the security deposit on the new one from whats left of their old deposit. Said Tenant is also paying for both at the moment as he is taking his sweet time moving from one to the other. No problem there.

I'm glad its happening because now I can fix up his old unit and have another upgraded unit I can raise the rent on. Generally, the tenants want to also upgrade to a nicer unit that is more expensive so you're making a little more cash flow with no turnover time. 

Steven J., Will See Real Estate | 240‑394‑5733 | http://WillSeeRealEstate.com

The existing tenant likely assumes that there would be no cost to them in the transfer - the truth of the matter is that there is likely to be a cost to you in needing to renovate their unit.  In some cases, they may have done some damages to their unit & have not considered that you may need to withhold some amount of money from them in the event of a transfer.  Make sure that is communicated if you entertaining their request.  We had the same situation arise and we said "no".  Our tenant "officially" had one dog on her lease, but there were always two dogs at her unit, and so we didn't want the one or two dogs to beat up the new (vacant) unit.

Has this tenant beat up the unit they are now in?  If so, you don't want the other unit to get best up so quickly. On the other hand, your tenant might give notice because they want a "better" place. I would consider allowing it if you didn't already guess ;)

Reviving an old topic here since this situation popped up again.

For those who charge a transfer fee, how much do you charge?

@Sam Leon

No fee here but in the rare cases I do allow a transfer I require a full security deposit for the new unit upfront. Once they have vacated their old unit I will then inspect and return their old deposit if there are no damages.

I typically only allow transfers for great tenants who I'm pretty certain will leave to find another place anyways if I don't work with them. 

Medium faviconRyan Murdock, Lighthouse Asset Management LLC | [email protected] | http://www.lighthouseam.com | ME Agent # BA915543 | Podcast Guest on Show #234

@Sam Leon I would only consider this for a lights out tenant that keeps their apartment very clean thus limiting the turnover you will have to do to their unit when they move out.  Otherwise I would not even consider it.  Most tenants are not worth doing this for.

Medium rzt hc 6483Michael Noto, SalCal Real Estate Connections | [email protected] | 860‑384‑7570 | https://www.zillow.com/profile/Mike-Noto/

If it is a good tenant you agree however you tell them the rent on the refurbished unit is  higher than their present rent. Set the rent at $50 more that you would have planned on renting it for originally. This will either dissuade them from moving or you end up making more money to cover your costs. Win/win.