Investor · Seattle, WA · Member since 2016 · 156 posts · 34 votes
Hello lovely Bigger Pockets community members! I am finally under contract with an awesome house hack duplex! After a year trying to buy north of Seattle we finally got something.
Here is the problem. Closing is set for June 26th. The tenants lease is not up until August. The tenant has lived at the property for 3 years. They use a back garage / shed and pay $150 under market for rent. I need to raise the rent $150 and take back the garage. There is no move In check list, so I am afraid if I make them unhappy with all these changes and they decide to leave, they could trash the place and just say everything was like that before (when I toured the home they had already blamed some things on someone else).
Is this a valid fear? Any suggestions on what to do?
Woodinville, WA · Member since 2018 · 37 posts · 18 votes
8y
@Blake King Don't worry - you are in Marysville. Unless the place is a dog, can get 10 applicants the first day you list.
Honor the lease, then raise the rent $150 when it expires. Read the previous owner's lease very very well. On your first day of ownership, knock on the door and say hi. @Mindy Jensen said this and I'll echo it. Make a new move-in checklist and go over it with your tenant. It sucks to eat that cost but its tiny compared to what you paid for the place. Inform them of the damage deposit you are holding for them and that they can receive this after move out when the place is returned to this condition. And yes they will tell you a bunch of stuff needs fixing.
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
8y
@Blake King Congrats on the duplex and welcome to the neighborhood! All of our properties are in Mount Vernon, so if you want feedback on rental prices, etc. I'm more than happy to help! All of our rental agreements are month to month, some times we keep a good tenant at below market rent because we want them to stay, and other times we get it up to market rent because it is so hot right now! Maybe he's a good tenant and you will not want to deal with a turnover, or maybe you want to start fresh. Looking forward to hearing more about your MV deal!
@Blake King Congrats on the duplex and welcome to the neighborhood! All of our properties are in Mount Vernon, so if you want feedback on rental prices, etc. I'm more than happy to help! All of our rental agreements are month to month, some times we keep a good tenant at below market rent because we want them to stay, and other times we get it up to market rent because it is so hot right now! Maybe he's a good tenant and you will not want to deal with a turnover, or maybe you want to start fresh. Looking forward to hearing more about your MV deal!
JULIE! Thank you so much for reaching out. Really glad to hear someone extremely local, you will understand whats going on in Mt. Vernon better than anyone. I sent you a Direct Message and am super thankful for the advice and help!
Hello lovely Bigger Pockets community members! I am finally under contract with an awesome house hack duplex! After a year trying to buy north of Seattle we finally got something.
Here is the problem. Closing is set for June 26th. The tenants lease is not up until August. The tenant has lived at the property for 3 years. They use a back garage / shed and pay $150 under market for rent. I need to raise the rent $150 and take back the garage. There is no move In check list, so I am afraid if I make them unhappy with all these changes and they decide to leave, they could trash the place and just say everything was like that before (when I toured the home they had already blamed some things on someone else).
Is this a valid fear? Any suggestions on what to do?
Thanks everyone!
You can do a walk through prior to closing and take pics. So the they will trash the place when they move will be documented as to before and after your possession starts.
You’ll need to honor the lease agreement. Once you close you can give a 30/60 day notice as to what you want to change add or subtract from the original lease agreement. You can make them sign a while new lease agreement. You didn’t state if the lease is a month to month or a year to year nprenewal, but If they have been there for three years they are most likely on a month to month basis. If their lease is on a recurring year to year renewal you need to make your changes within the allotted time for the notice to take effect before the new renewal timeline starts which means before closing. Otherwise if it’s axmonth to month i would wait until after closing and you can do what you need or want to.
Don’t forget about the initial security deposit the old landlord had HAS to be transfer it into your name. That money is the tenants money. You may or may not need to keep that money in a interest bearing account for the duration of the renters occupancy.
Get a copy of the old agreement and read through it carefully. The Current LL should have pics of the property before the tenants moved in. If not you’ll need to get pics of current state of thecproperty. You’ll most likely have to eat the existing damage costs at move out time. Ask for proof to see if they paid on time. If they are good tenants I would be careful about raising rent that much. How much percentage of the current rent is $150 exactly? Are you under rent control? If yes can you raisec the rent that much in a percent number? If not under rent control are you limited in how much you can raise rent legally or is there a limit? How long is the notice time allowance to raise rent? 30/60/90 days?
You need to look at the costs of replacing a tenant if try do decide to move. That $150 rent raise can cost a few thousand in lost revenue. You can find tenants. Finding good qualified paying tenants is harder.