So, I invest in near our local college.... however, I've never inherited non-student tenants before. This house makes a great college rental..: nice brick SFH with 7 bed, 3 bath, brick row home... love the house... we closed today... i own 3 other very similar buildings and know it should rent out for around 3-3.5k/mo.... here's the kicker, there's currently a family living in it paying just $1200/mo... it's a lower income family and they're have about 9 family members living there.
I know I won’t get students in there until June.... but I’ll need to be able to start showing the property around Christmas-/ I usually have my units rented for the following school year before Christmas.
I’ve never done this before, do I just notify them of a rent increase since they’re month to month?
I don’t anticipate it being easy for a large family to find another suitable place in just 2 months... any suggestions on how to fairly handle this while still being able to accomplish my goals of having it ready to be viewed in just 4 months?
The property doesn’t need rehab... other than whatever touch ups/cosmetic work needs to be done when they move ouT.
Any and all advice much appreciated,
If they're at $1,200 and the market is between $3-3,500 there is zero chance you're going to able to increase their rent anywhere remotely close to that and retain them. Besides, inherited tenants often come with inherited headaches.
Serve them with the shortest notice to quit that you legally can (both by whatever is in their m2m lease and Ohio laws) to get them out as soon as possible. Though it's tougher to rent in fall/winter, if the place is only renting between 25-50% of market, I'd be shocked if you couldn't do far better than what they're paying you now. You can go m2m if you want and then play the student market the following year if you think you can do better.
@Mark Nolan i know they’re not going to be able to stay/afford... I just want to do it fairly...
I also know I’m going to be holding this one vacant until June, Thats one of the downsides... but once I get it lined up with the school year I’ll be good... don’t want to have to evict... and kick a family so to speak.
My only other thought was to maybe convert to duplex... pretty easy in this home... maybe Airbnb a unit.... I'd like to keep it SFH because it maximized bedrooms and means tenants can cover utilities.