How do I Get Tenants Out Of A House You Want To Buy?

Question

All friends,

I am looking at a property I would like to purchase ,that has a current tenant living their.  This tenant is on a month to month lease.  Can I just terminate their lease with proper warning?

Bjorn Ahlblad · Answer

Make your offer to buy with the tenant gone; then it’s the sellers responsibility.

Marcia Maynard · Answer

@Douglas Gratz  What you can do will depend on the landlord-tenant law for your jurisdiction. Where is the unit located? If rent control isn't a factor and you want to force a move, you could. But be aware of the costs associated with making the unit ready for the next tenant and the loss of rent during vacancy. Do the numbers. Sometimes it makes financial sense to raise rents in increments. Sometimes it makes societal sense to raise rents slowly rather than in a way that will force families to relocate.

If the unit has been rented significantly under market for a number of years, the tenant won't be surprised by a rent increase with the change of ownership. They are most likely scared and already looking at other places. Generally a rent increase of more than 10% is considered excessive, especially if no improvements have been made to the rental unit.  In your situation, $65 would be a 10% increase, $130 a 20% increase, $195 a 30% increase, $260 a 40% increase.  Depending on the tenant's financial situation they may or may not be able to jump as high as $900 per month (38% rent increase).

You can shoot for the top of the market, weather the vacancy loss, and make the necessary property improvements to attract good new tenants. Or you can offer the tenant a rate that's affordable for them, but still high enough to meet your needs.

You could offer to continue to rent to them at $800 a month; a $150 increase that would be less of a stretch for the tenant. That would only be $1200 ($100 x 12) off your mark for the year.   You would have lost at least $1200 anyway during a turnover, so you'd still be ahead. Then the next year you could raise the rent to $900 if you wish. But everything is negotiable. If you approach the matter with care and compassion, you could save the tenancy. Even if the tenant felt the need to move at that juncture, it would be their decision to do so and the transition would likely go more smoothly.

Douglas Gratz · Answer

@Marcia Maynard

Thanks, yeah I just want them out because they pay 650/month where as I can get 900.

So if they are on month to month lease, I can raise the rent. If they do not agree I can get them to vacate correct?

Douglas Gratz · Answer

I want them out because their rent is to low , so I want to make new terms and if they don’t agree I need a new tenant

Marcia Maynard · Answer

Don't require the current owner to deliver the unit empty or you may lose the deal. What are your reasons for wanting the current tenant to vacate? Unless you plan to occupy the property yourself, consider what it would take to save the tenancy. We've bought occupied properties and were able to easily transition the tenants over to our rental agreement. Our longest term renter (inherited) has been in the same apartment for 30 years and is a great tenant!

If you plan to move into the house, then be reasonable and give the tenant plenty of notice. Even if the minimum required is 30-days, allow them at least twice that. It's very difficult for any family to uproot and find other suitable housing within 30 days. You will want to negotiate a move-out plan that will be the least stressful and most efficient for all parties involved.

If you want the renter out because they're a really bad tenant (not paying rent, causing property damage, disrespectful, and/or dangerous), then do so as quickly as you can, with the help of legal counsel. The goal would be to regain possession of your property as quickly as you can with the least amount of damage. See if the tenant will agree to voluntarily terminate the rental agreement early. Some tenants will do so if they have extra incentive.... such as cash for keys.

Hunter Fitch · Answer

Yes. Their current lease will transfer during sale... then give them notice they'll need to vacate. Make sure you do it according to your state laws, most require a minimum of 30 days notice.

How do I Get Tenants Out Of A House You Want To Buy?

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