Tips on inherited tenants?

General Landlording & Rental Properties
6yFollow

Tips on inherited tenants?

Cory LucasPro Member
Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes

Hey BP, gearing up for our first purchase, yay!

It’s a duplex with 2 tenants currently renting with leases up in April.

Any thoughts on best ways to handle inherited tenants? Things not to do? The current landlord told them he’d be raising their rent to $450 come April. They’re 1/1 units and that’s about right money wise for my area, could get a little more probably, but they’re currently renting for $400/month.

So I plan to increase the rents to the $450 and was going to add in a pet fee as they both have cats even though previous landlord said no pets, he’s knowledgeable of them and allowed them to stay, so my thought was to honor the $450, make it $425 with a $25 pet fee. This is more for future tenants at other potential properties to make sure I’m playing fair. They both seem to be good tenants, so I’m fine with them staying and was leaning toward allowing pets anyway.

Advice, experience, what’s worked, what hasn’t worked with inherited tenants is all appreciated! Lemme know if you need more info that I didn’t provide

Thanks in advance

2Reply
58 views

Most Popular Reply

Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
6y

I would just raise the rent to $450 and forget the pet deposit.  If you only raise it to $425 with a pet deposit, watch how fast the pets 'disappear' and you have to prove they are there or they quickly become therapy pets.  You will still have the pets, just not the money. There is not really a benefit to you by separating the amount.

7Reply
See this reply in the discussion

42 Replies

Jump to latestLatest
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    6y
    My best advice in that situation is only offer them m2m leases until you get to know them. I just bought a group of duplexes with a drug dealer that has until end of July :( I'm hoping to get them out but it's soooooo much easier with a m2m lease.
    5Reply
  • Sandy Gabin
    Rental Property Investor · Lawrence, MA · Member since 2020 · 252 posts · 153 votes
    6y

    Hi Corey!  I have had experience in this subject. Boy, I went through a rough experience.  I was told that it wasn't going to be pretty, but I faced not only one but 2 tenants. I went to them and I told one tenant that she had to vacate the unit because it was inhabitable and it became a nightmare. The second tenant,  I went to her in a good way and that the rent would increase 200.00 more. Guess what she said, she said that the apartment wasn't worth it and that she would move.  Last thing I did was I took her to court and she was out right after school vacation started. That second tenant gave me a hard time to but that would be another story.  

    Just be yourself and have confidence and control.  I had these issues because the seller didn't have control over the tenants,  they had control over her! Until they met their match.....Hope this helps. 

    1Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    6y

    I'm just today getting rent from new to me tenants. 2 of the 3 are renting under market. We have a plan to raise them up "some" but not all the way and we'll do it in increments. ie, 60 day notice for half of the increase and then 6 months later they pay the other half. By then the property should be stabilized and cash flowing. (duplex and sfr 2/1)

    0Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    6y

    I would just raise the rent to $450 and forget the pet deposit.  If you only raise it to $425 with a pet deposit, watch how fast the pets 'disappear' and you have to prove they are there or they quickly become therapy pets.  You will still have the pets, just not the money. There is not really a benefit to you by separating the amount.

    7Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Jill F. Thanks for the insight, much appreciated

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    Go to the search bar (magnifying glass) at the top of your screen and type in "inherited tenant" then read for the next 42 days. Or look at more than one page of posts in this forum. This topically typically comes up 2-3 times a day.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    4Reply
  • Jeremy A.
    Rental Property Investor · Central New York · Member since 2019 · 18 posts · 6 votes
    6y

    I'm a huge advocate for M2M "agreements". The best advice I received was that leases protect tenants not landlords. A majority of the time you will never see a dime if a bad situation does erupt. Word of advice, keep the tenants happy and you'll be happy.Try M2M at first and then give them a longer lease. 

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Sandy Gabin thanks for the sharing of your experience and advice! Much appreciated

    0Reply
  • Sandy Gabin
    Rental Property Investor · Lawrence, MA · Member since 2020 · 252 posts · 153 votes
    6y

    Anytime Corey! You have an awesome day !

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @John Teachout good thoughts, thanks for reaching out

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Lynnette E. My only concern there is for future tenants whether it be at this property or others. I don’t want to run into any discriminatory practices. Thoughts?

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Nathan G. You are correct sir. I chose to post for a couple reasons. One to stay active on here and two to have my specific questions hopefully get addressed and keep it in one spot to more easily refer to. Definitely appreciate the insight and agree there is a wealth of information here!

    1Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    6y
    Originally posted by @Account Closed:

    @Lynnette E. My only concern there is for future tenants whether it be at this property or others. I don’t want to run into any discriminatory practices. Thoughts?

     There is nothing discriminatory.  You are raising the rent and allowing the pets to stay.  Personally I do not charge pet rent.  It only increases the chance the pet will be a support animal.  I charge the rent I want.

    0Reply
  • Zack Bloom
    Greenwich, CT · Member since 2017 · 30 posts · 9 votes
    6y

    Seems like a fair rent increase, with the $25 pet fee justified. It takes a lot of paperwork and time to get the animals declared therapy pets, it's not as easy as people think it is. If the pets disappear you can always raise the rent formally up to 450 in a few months time / post lease to cover the difference. 

    0Reply
  • Mark OGara
    Investor · Bellevue PA · Member since 2016 · 52 posts · 10 votes
    6y

    Hi Cory

    The first review I would suggest is compare the old lease to the terms and conditions in your standard lease.  

    Next I would look at what is standard deposits and fees in your state.  A pet fee is paid upfront and can offset repair costs on the back end of the lease and a deposit is returned if there is no damage.

    I would also suggest you do a move in inspection of each unit and document the current state of the property - floors, walls, ceilings etc. We use the HUD inspection sheet for all our tenants on move in and move out, a little harder to do when you buy a property and inherit a tenant towards the end of the lease. Hard to defend a repair when the tenant says it was like that when I moved in!

    On the month to month or year lease, I would opt for a year lease and you can always have a 30 notice clause in your lease.

    Good luck

    0Reply
  • Robert Crowley
    Rental Property Investor · Great Mills, MD · Member since 2014 · 21 posts · 13 votes
    6y

    Keep in mind that you will be raising their rent by more than 10% going from $400 to $450. Check your local/state laws to ensure that you can do this and the advanced notice you need to give. In my state, anything 10% and above requires 60 days notice.

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Jeremy Aiello thanks for the advice and feedback, much appreciated.

    0Reply
  • Brent Crosby
    Rental Property Investor · Farmington, UT · Member since 2018 · 171 posts · 148 votes
    6y

    @Cory Lucas my biggest advice is if you get any sense that their not used to paying on time OR that their previous owner let them go months then get caught up your best move is start serving eviction notices if they are late at all with you so they know you are serious. If that doesn’t get their attention and shape things up... follow through with the eviction. Sounds harsh but once a tenant has been trained it’s ok to be late your in for a world of hurt. Eventually they won’t be able to ‘catch up’ and you’ll be out a lot of money in lost revenues

    1Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Lynnette E. Good point. Thanks for the time and replies

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Zack Bloom thanks for the thoughts and reply, much appreciated

    0Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    6y
    Originally posted by @Account Closed:

    Hey BP, gearing up for our first purchase, yay!

    It’s a duplex with 2 tenants currently renting with leases up in April.

    Any thoughts on best ways to handle inherited tenants? Things not to do? The current landlord told them he’d be raising their rent to $450 come April. They’re 1/1 units and that’s about right money wise for my area, could get a little more probably, but they’re currently renting for $400/month.

    So I plan to increase the rents to the $450 and was going to add in a pet fee as they both have cats even though previous landlord said no pets, he’s knowledgeable of them and allowed them to stay, so my thought was to honor the $450, make it $425 with a $25 pet fee. This is more for future tenants at other potential properties to make sure I’m playing fair. They both seem to be good tenants, so I’m fine with them staying and was leaning toward allowing pets anyway.

    Advice, experience, what’s worked, what hasn’t worked with inherited tenants is all appreciated! Lemme know if you need more info that I didn’t provide

    Thanks in advance

    Some things depend on where the property is.  But, if it was me managing a place in CA, first, I'd go ahead and give them written notice now that they'll be going M2M when their leases expire, and include a copy of the new M2M agreement, with the info that if they intend to move out, they need to give you notice by March 1st to be out by April 1st.  And I'd put in the notice that their rents will be going up to $450.  

    I agree with the others that pet rent is a bad idea.  Not even legal here in CA.  Pet rents can be considered non-refundable fees or part of the security deposit on and on, which can be a pain.  Just simpler to charge the higher rent.

    As to being discriminatory - it's my opinion that you can set your criteria differently for different properties (that are otherwise legal).  Since you'd be treating the tenants the same for both units in that duplex, I wouldn't worry about it.

    Plus, you can always change your criteria, as you learn new lessons about how to screen tenants.  I used to email my new criteria to myself, to establish a date.  For instance, I may have learned that I didn't want to rent to tenants who didn't completely fill out their applications anymore, or to tenants who show up late to appointments or who smell like smoke - whatever.  As long as I could prove that I created new criteria on a certain date and then applied it across the board to all applicants from that date forward, I was fine.

    By the way, if the tenants are concerned about you raising the rent again because they'd be on a M2M agreement, what I did was I'd write in a clause that said that as long as the tenant was still a tenant in good standing, I wouldn't raise the rent for 12 months.

    Tenants are afraid of new landlords because they're afraid of their rents being raised, so if you just let them know right now, that will be helpful.  They're also afraid the landlord will make them get rid of their cats, so you'll have to decide if you want to pretend you never saw the cats.  If you want to get rid of them, this is the perfect opportunity - sorry, your lease will not be renewed because you brought in a cat which was against the lease.  Another option would be to ask them for more deposit money because of the cats.  

    And they're afraid you'll be a jerk.  You can be decent without being a pushover, though.  They may also be watching to see if they can take advantage of you.

    You kind of have to figure out what you want.  Want them to go?  Don't renew the lease because of the cats.  Perfect, legal reason.  Want them to stay but pay more rent?  Price the unit just enough below market that it will be cheaper for them to stay.  And let them know now about the higher rent and deadline to make their decision.  They'll freak out for a minute, even if the seller actually did warn them of an increase, because they always still freak out and get irritated, but then they shop online to see what they could get and unless you price them out, they usually stay.  Especially if they can keep their cats.

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Mark OGara great stuff! Really appreciate the time and thoughts put into your reply. Any thoughts on pictures or a process for documenting condition of the property when I acquire it? Thanks

    0Reply
  • Billy Smith
    Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
    6y

    Do a walk through talk to them does any thing need fixed ?Then still walk around check out the furnace pull the filter is it dirty ,let them know a dirty filter can damage a H.V.A.C system .I buy a case of filters make it easy as possible to keep the filter changed .

    Look at the bathroom is there water damage ,how are they living ?

    Keeping the gutters clean is a must helps prevent water/damage in the basement .This is a tough one I find very few keep the gutters clean .I bought a blower with a attachment  that can reach gutters blow out crap it  makes it easier  .

    Give them your phone number !

    Let them know you will be signing a new lease as soon as the old expires or they need to move .

    0Reply
  • Cory LucasPro Member
    OP
    Rental Property Investor · Brighton, IL · Member since 2019 · 431 posts · 139 votes
    6y

    @Robert Crowley good thoughts, really appreciate you chiming in. I’m sure I can find it, but a particular site or area of government to check with you recommend?

    0Reply
  • Robert Crowley
    Rental Property Investor · Great Mills, MD · Member since 2014 · 21 posts · 13 votes
    6y

    Cory,

    This is what I found:



    https://www.nolo.com/legal-encyclopedia/illinois-termination-nonpayment-rent-other-rent-rules.html

    nolo.com is pretty good about explaining the law in layman's terms and ease of use.  

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free