I am set to close on a property next Friday. It is a duplex and one side is already rented out. I would like to keep the current tenant but he is currently on a month-to-month deal as he has already been there for 5+ years. With a reliable history of on time payments I don't want to scare him away.
How do I go about getting him off the previous rental agreement and onto a new one? I would like to try to switch him to 12 month term and potentially up the rent gradually. Can I reach out to him before I close or should i wait until the property is in my name? Anything else I should be weary of? I don't think I need a new background check given his reliability.
Thanks in advance,
I always have the seller get a 12 month lease signed with the tenant before I close. The tenant will want to do that because they always think you are going to raise the rent immediately. Then raise the rent at the end of the lease to market rent. Good luck.
Since you are going to be the new landlord and you need to approach it as such, you cannot be afraid to tell the tenant what you want because you have to remember that you are training them on how you want things to be. Also, must tenants do not want to move anyway so they will more than likely comply. Just go in letting them know you will continue to fix things and take care of the property as the previous regime but you prefer a 12-month lease and that is how it will be going forth.
You can even give them a month or 2 grace period of a month to month and then add the 12-month lease, which would also give you some time to find a tenant for the other unit. But do not be afraid to enforce your rules.
I would like to comment on this one. When I bought my first multi family property, the owner told me from the beginning that I had to evict the tenants, because they weren't good tenants. One tenant would not pay the rent while the 2nd tenant had a bad attitude. So yes I inherited it the problems that came with it. My mayor fear was going to court, and I was able to confront both tenants. At the end, they were out of units. Don't be afraid or feel a little fear when you will be the big boss. Trust me, I was in your shoes. It will be your turn to organize and to set your own rules. On my end, I did spend more than a year to fix the units, and I was able to set my rules and did do a month to month contract with all tenants. Where I am from, apartments are ALWAYS in high demand.
@Kevin Trapani , the easiest time to make change is when you first take over the property, set your expectations up front and let the cards fall where they may. Good luck!
Great advice everyone. The closing went smoothly and I had the previous tenant moved over to my new 12 month lease which he happily agreed. Working on finding someone for the other half. Thanks again!