I'm closing next week on a property that has 2 long term tenants (since March 2009). One of the tenants are older (65+). They treat and act like it's their house. Any tips on how to formally introduce my self to them? They are both on month to month and drastically under valued rents. This will be the first property we closed on with this long term of tenants In them. Thanks!
I would call and set up an appointment to do a meet and greet with a walk-through. Make it more of a "trying to determine what needs to be improved on" appointment. Once the walk-through happens, discuss your expectations moving forward. Train your tenants to meet your expectations. Business is black and white. Raise the rent to meet market expectations and inform them that this is where the market rates are. Provide them a written 30 day notice of the change in rates and have them sign a new lease. Congrats and best of luck!
Hi Grant, I'm in the same boat. My realtor said to get them on a lease ASAP and I should raise their rent. It's unlikely they would move right away but it's possible. A friend of mine said raise one side at a time months apart to lower your risk incase one leaves. I could probably get away with that because one tenant has 4 previous eviction notices from 5 years ago. I could say that I had to raise rent on him because he his higher risk. I'm not sure how I'm going to handle it yet but it is good to look at all options.
Raising one and not the other is discriminatory and not fair to your tenants. As a landlord you are obligated to treat all tenants equally. Give notice to raise all tenant to market rent and have them each sign a M2M tease. Stay away from term leases they only benefit the tenants and take away a landlords right to control their property.
Just make a tenant orientation sheet and print it out. Include you rules and policys. If you plan to raise rents, let them know they will go up quarterly or not. Go meet them, shake hands, give business cards.
Raising rent on one and not the other is not discriminatory unless you do it because they are a protected class. Every residence is unique and could be rented for different amounts for a variety of reasons.
That said, I would gradually raise the rent over the years unless you are ready to rehab the place and then raise them up to market value.
If you raise significantly, perhaps do some upgrade of significance to "give" them something as a result of the increase. That also helps maintain the residence over the years.
Good info guys... so Greg, you only do M2M leases? I thought it would be beneficial to lock them in long term leases.
Congratulation on your first deal! In my opinion you should definitely sent them a nice letter saying you would like to set up a meeting to meet with them and their permission for you to see their house that way you can build a good relationship with them and check if the apartment needs any renovations. I feel that if you talk with them sincerely and tell them your ideas and confirming with them that you will be tentative landlord for the house and that you will raise the rent because of market value it shouldn't be problem and if there is than you can just get new tenants. Also, depending how low their rent is maybe you can negotiate with them a price that is convenient for the both of you so that is not too much of a drastic change for them, but enough for you to get good cash-flow and for them to pay, make it a win-win situation. I think that would be a good idea. Best of luck to you :)
my city requires offering at least 2 years... but i have the same question, there's no benefit to lock in a qualified tenant for a year?
I should have listened to @Thomas S. and not locked my tenants in one year leases. One tenant is great and set-up automatic payments, while the other insists on paying late every month, forcing me to send 3 day vacate notices.
Sorry I never got back to this thread 4 months ago, I lost track of it.
In a state where you are obligated to provide a term lease it is obviously a pro tenant state. Term leases will only benefit a tenant and make it very difficult to correct bad behaviour or evict because the tenant knows they are in control of the property.
Remember you are renting to total strangers and even with good screening tenants can and will go bad. Good tenants should have no problems being on M2M because they know they will not have issues with a landlord. Bad tenants will avoid M2M like the plague.
Provide M2M to new tenants to check them out and easily get rid of them if they do not work out.
Remember a term lease does not insure when a tenant will leave, The majority of tenants do not respect a lease when they need to move.
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