Removing good tenants

[Sean Connolly]

I have been caught in a dilemma for months now. I have a 3 unit property. There is a 3BR SFH and a duplex with two 1BR apartments. I have been living in the 3BR since purchasing the house two years ago, slowly fixing it up. The time has come where I have completed what needed fixing. My plan is to move into one of the 1BRs when they become vacant, but neither plan on moving anytime soon. Both units have good tenants who I have had almost no problems with, but by moving into the 1BR, I can rent the 3BR out and would completely cover the mortgage, giving me more to save toward another property. (Not to mention I love that apartment and prefer it over the 3BR)

Would it be wise to remove a good tenant just to make more rental income? 

3BR Rent in my town averages $1400. 1BR Rent average is $800. They are paying $750 for a higher end apartment for the area.

Any input is greatly appreciated.

[Account Closed]

I think you need to keep your plan in mind, and that involves having to terminate the agreement on the 1 bedroom.

I would not give them 3 months plus cash.  It seems like in these situations, the tenants are still there to the last minute.  If you were willing to give them, say, $3,000 (you decide, I'm just pulling a figure out of my hat) max, then I'd offer them $3,000 if they can move in 30 days, $2,000 if they can move in 60.  That you'll give them a total of 90 days, but they will get no incentive money if they haven't moved within 60.  Something like that.  And that you will also hand them their full deposit on move-out day, as long as they leave the place clean.

Then, they may be quite happy to move quickly.