I'm going to be buying a duplex as an owner occupier. The purchase price is $100k its a twin with a ground level basement with a separate door entry way. Anyway the upstairs unit is already occupied with the rent $500 per month. I plan on living in the first unit and remodel the basement. Should I inherited the tenant upstairs or should I have him leave. He is on a month to month lease and prefer not to leave. What should I do? I don't know to guy and I'm concerned about potential things I'm not aware of about the tenant. Thanks for reading this.

Hi Derone,

Is $500/month the market rate, or should it be higher?

If it is a reasonable rent, I would have the guy stay, as long as he passed the background (criminal/credit/eviction) check.  I would have him fill out an application, and i would cover the fee to do the background check- it isn't his fault the place was up for sale and he has to re-qualify with you.  

If it isn't reasonable, I would let him know what the increase was going to be (giving proper notice before the increase) and still go through the application process.  He may decide to leave, at which point you can start your search for a potential new tenant.

Kelly

@Derone Patterson Congratulations on your purchase!

I would start by getting any info on the tenant that you can from the current owner. You really need a copy of his rental app, lease and background check. If no BG check, then run one yourself. Then you can make an informed decision about whether to keep him or not.

If you decide to keep him, be sure to get an estoppel letter. This is basically a form where the tenant tells you if there are any agreements with the landlord that may not be in the lease. You don't want to hear later: "I know my lease says my rent is $500 per month, but the landlord said I only have to pay $300."

The other comments suggesting a background check is good advice. I'd leave the tenant on a month-to-month basis and not renew the lease for a bit until you know him better. If he causes problems, end his tenancy. If he is good, then sign a renewal.

So you are converting a duplex to a 3-plex?  Your tenant might leave on his own because he doesn't like all the noise and inconvenience of construction.  Ask the current property management company for a bank roll on the unit to see how long he has been there and what his payment history is like.  Make sure to have good communication with the tenant about your plans for the property.   

Originally posted by Account Closed:

@Derone Patterson Congratulations on your purchase!

I would start by getting any info on the tenant that you can from the current owner. You really need a copy of his rental app, lease and background check. If no BG check, then run one yourself. Then you can make an informed decision about whether to keep him or not.

If you decide to keep him, be sure to get an estoppel letter. This is basically a form where the tenant tells you if there are any agreements with the landlord that may not be in the lease. You don't want to hear later: "I know my lease says my rent is $500 per month, but the landlord said I only have to pay $300."

 Thanks, you make a great point I will consider doing those things.

Originally posted by @Rob Nixon:

So you are converting a duplex to a 3-plex?  Your tenant might leave on his own because he doesn't like all the noise and inconvenience of construction.  Ask the current property management company for a bank roll on the unit to see how long he has been there and what his payment history is like.  Make sure to have good communication with the tenant about your plans for the property.   

 Thanks I will consider that.

Originally posted by @Tyson Luthy :

The other comments suggesting a background check is good advice. I'd leave the tenant on a month-to-month basis and not renew the lease for a bit until you know him better. If he causes problems, end his tenancy. If he is good, then sign a renewal.

 Ok thanks. Good advice!