Should they stay or should they go? Inheriting tenants

[Christen G.]

What's everyone's opinion on inheriting tenants? I've heard a lot of strong opinions on "terminate immediately and start fresh." That's usually based around the theory that this way you can screen the tenants, gets rents to where they make sense for your deal, etc...

We're closing on a triplex and everyone is on month to month leases. I'd like to do some renovating in one unit specifically - should we just terminate and get on with it or issue a 12-mo lease with higher rents and give them the option to stay?

[Tracy Streich]

It really depends on how important the renovations are to do right now.   If you do the renovations how much more will you get in rent.  Use this example:

current rent $800

rent after renovations $1000

$5000 renovation - remember it always cost more than you think

This means you will break even in 25 months.   Why not let them stay if they are not asking for the renovations and just renovate each unit as it comes vacant.   The 25 month break even does not include lost rent during the renovation.   If it takes 2 months to renovate and lease it again you removed $1600 income as well.   

I am not sure why people love to "start fresh".   The the key to having a rent home work is occupancy.   I love buying occupied homes.   I have income from day one.   You can get them on your lease.   Let them know you would love to have them stay and offer the exact same terms.   Same rent amount and leave it month to month.   Then you have the lease with your wording and you remain in control with the month to month lease