First Triplex! Tenant questions.

4 Replies

I just closed (8/18/15) on my first ever investment property which happens to be my first house as well. I bought a Triplex and plan on living in one of the units and renting out the other two. My father who has helped me through this entire process is a bit old school and is giving me some advice that I don't agree with and I would like to get a second opinion.

All the rents are $200 under market value and he insists that I do not raise them. I plan on renovating each one and raising the rents after. Is this okay?

Second, The tenant in the middle unit has Christmas lights hanging from the house over to bushes for some reason and also has a punching bag in the front yard, It gives it a "Ghetto" feel for me and I would like him to take his things inside. Would asking the tenant to move their things inside be over stepping the boundaries or am I in the right..?

I would politely inform him that you are the new property owner and landlord, and introduce yourself. Do you have a copy of his lease? I'm sure it says something about keeping the property clean- if it doesn't, add that into your new one. I would ask him to relocate the punching bag and Christmas lights to a location that is not in view of the public. Let one thing slide and they think everything can slide... I would be upfront and rule enforcing from the beginning. Tell him you are moving in, cleaning the place up and doing some repairs, and you need his outdoor items removed unless seasonally appropriate. Something like that. I am first time triplex owner too- purchased 5/2015 but been managing it for 2yrs. Live in as well. Good luck.
Oops- forgot to add- heck yes raise the rent! I would raise it as soon as I got in even without the renovations. When it was updated I'd raise it again. Not sure where your fathers coming from but you need to keep up with the neighbors- see how much comparable units are renting for and what they look like inside.
Check the lease is right. You have to follow that first. Also, be ready for confrontation if you are living there as the property manager. If you aren't ready then you should hire a property manager and not let people know you own the building.

Having rents a little below market can do great things for you. I don't think keeping the rents below rate is "old school," just bad business. I like the concept of just below the high end. I don't like vacancy just because I want to push limits. To me that starts bordering on greed.