I have multiple rentals I'm inheriting and all of them are being rented well below market value. None have leases and none have paid any security deposit. Most of the properties are in rough shape and need a variety of work done.
In Ohio I know I need to give a 60 day notice for a large rent increase. Most will go up by $50 and a few I need to raise by $150 to bring the rent to market value.
My thoughts are to sent a letter of notice along with a copy of what will be the lease agreement if they choose to stay. I feel like it might be better if they did decide to move, so I could do improvements and with any new tenants I would want first and last months rent with a security deposit. Idk Any advice?
Hi Jason, If possible, introduce yourself. First via email letting them know that you want to meet with each tenant and tour the unit. Also, make clear that things are going to change. You know there is deferred maintenance and you would appreciate getting their list of items that need repair along with a picture of same. Be warned, much of these items will be caused by your tenants. Mention that you will enter into leases and be raising the rent. For those who choose to stay prime them for an annual increase by stating that those who sign a two-year lease will only have a xx% increase. Best, Teresa
I agree, letter of introduction, Information for contacts for service and where to pay rent. all that good stuff you probably have done already.
Next notice of date you will be inspecting the apartment, you take the photo's you make notes and see what the condition is in, Maybe you don't want to renew their lease even if you fix stuff. so make sure you don't say your giving renewals until you intend to do that. I never ask tenants what they want fixed, I just assume it works until it's mentioned. Or realize it's so bad I gotta get in and take care of it ASAP.
Once that's figured out. Next letter is renewal, lease option and rate, for what you will be charging that's what it takes to be in business.
You'll have to meet proper notice periods for month to month rentals, so if you don't want the whole place vacant give the best apartments their notice of rent increase first. the worst units last they will probably move out anyway.
Be prepared for vacancies and people waiting for you to kick them out.
And some I'd say well if you resign that new 12 month lease, I'll be happy to paint that living room and shampoo that carpet for you..
I know it's a lot of work, but meeting each tenant in person is the way to go on such a move:
- You will get a chance to see the way the tenant lives in your property.
- You will get a sense of whether the tenant will stay or move.
- You will get a sense of whether you want to keep the property or sell it.
- You are building a relationship with the tenant in a positive way if you handle it properly.
- If you want the tenants to sign leases, you should present it to them in person to increase the chance of the tenant signing and to build good will in the process.
- You come across as a stand-up guy by meeting in person.
Notify your tenants you will being doing inspections, at the same time notify them of the rent increases to save time on the 60 day notice. Following the inspections notify those tenant that you choose to terminate.
All tenants new and old should be placed on M2M leases. This way you can easily terminate those you wish to do renovation work on in the future as your schedule permits.
Greg nailed it!
also be advised change of ownership and rent increase could lead to many of them leaving. so be prepared for vacancy and that may not be a bad thing then you can rehab them bring them up to standard and rent at market.
its one of the little tricks I have used over the years. to get rid of tenants I did not like with out a big drama.. it seems if you just evict them they get pissed .. but if you tell them you need to increase the rent they just kind of shrug their shoulders and move on.. that's been my experience anyway
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