New Property Purchase - Introducing a new lease?

3 Replies

Hi all,

We bought our first multifamily last month and are living in an owner occupied triplex. One of our tenants is on a M/M lease and we want to introduce a new 12 month lease on this 3bed2ba apartment. One of the 3 previous tenants has moved out and now 2 remain. 

We don't have background/credit check info, bank statements, income proof etc. as the tenants were already there when we bought the place. 

Should we have the remaining tenants go through a tenant application screening to ensure they meet income requirements, and other factors? 

Could I ask the daughter (the tenant that moved out) to act as a guarantor if her parents don't meet income requirements? It's a delicate situation as the mother has been there a long time....

Thanks - Appreciate any insight/thoughts.

When I acquire an tenant I don't see a need to screen them to see if I will allow them to rent my property. They are already in my property. I would just run with it and if they pay on time and they take care of the place them keep them, if not get rid of them. 

I would go ahead and have them sign my lease.

@Aathavan Raviraj the only way I would put a inherited tenant on a 12 month lease is if they went through all the normal screening and met my rental requirements. If you feel that they won't meet your rental requirements, then leave them month-to-month (but get them to sign your own lease as a month-to-month, don't leave them under the old lease), it's much easier to get them out of the place if you eventually need to. 

As to the daughter acting as a guarantor, would you normally allow this for someone applying if the unit was vacant? If not then my opinion would be to not do it for them, you want to try and be as consistent as possible regarding rental requirements.

I generally recommend you keep them on a month-to-month for a few months to see how they perform and then lock them into a 12-month lease. You may want to give them a new month-to-month lease just so they are under your policies and not the previous owner's.

However, they don't sound like great tenants if you're already worried about their ability to qualify based on income. If they've been there a long time, there's a good chance they're below market and the unit has deferred maintenance. I would seriously evaluate the situation and decide whether you even want to keep them.