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
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.
We closed on our first property with existing tenants on the 30th of January. Four units that are all occupied. 3 are M2M and 1 is under a lease unit September. I gave all of the tenants a letter with my information and methods on payment for the rent on the 29th during final walk through. As of today I have only received rent from 1 tenant who is a M2M. I have talked to a local lawyer and he recommended that we send a letter stating exactly what our process with late rent will be so that they have a clear understanding. His experience is that a judge will not grant the eviction if they have been allowed to pay late in the past with only a late fee. I am working on a letter now to inform them that on the 6th they will receive a 3 day notice to pay or vacate and on the 10th (pending weekends and holidays) the eviction process will begin with the court. If they pay after that date, they can stay, only if they pay late rent, late payment fee, lawyers fee ($300), and court fees for our filing ($130 I believe). We will see who is left at the end of next month.
We use the HUD inspection sheet for all our tenants on move in and move out,
That seems strange. The HUD inspection sheet is designed as a pass/fail checklist and covers mostly safety issues rather than the tenant-caused damage that I've charged for.
For example, the HUD form concerns itself with window condition, but nothing about window coverings. Did the tenant remove, destroy, or damage the blinds, curtains, or rods? No place to note that.
At least the previous owner already gave them notice that the rent was going up.... HUGE plus...... now you aren't the big bad new guy being an a-hole.
Just do the higher rent...cant add monthly rent for a pet in CA.... just a higher deposit.... which I would do....
Did you get an estopple ? Basically that is a document from the previous owner that goes over rentt and deposits that are already in place and the tenant acknowledges it. Once big issue is when they move out, they claim a deposit was given but you never saw that or got that $$ from the previous owner, so now you are stuck etc
Get a copy of the move in/move out from the original owner.....and then do a walk through when you take possession to document it now. The tenants will claim stuff was present at move in and you need to have document of the condition at move in to prove yes/no..... otherwise its a fresh start now and you eat the damage they did before you owner it
Get your lease in order and give it to them now, so they know what it will be when its time to renew..... I prefer M2M..... protects YOU and lets them know you don't screw around and will boot them with 30-60 days notice for any reason YOU want.
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
Congratulations! Many view inherited tenants as a bad thing. I think they can be bad, but they can also be awesome. Your situation sounds great. The leases are ending so you can install your own lease right away, which is what you need to do. Check your local tenant laws and the current lease to see what you need to do in terms of notices and all that, each state varies and of course each lease can vary too. You are going to collect rent on day one and will have zero vacancy - that's the awesome part.
I would install month to month leases. I would also not allow cats - lol - but that's up to you. I love cats and have two, but I will never allow them in a rental. A dog maybe.
@Cory Lucas Have you closed on the property yet? If not, a good lease would have a termination clause in the event of sale; provided, however, that certain notices are satisfied. Either way, entering into a new lease subject on YOUR terms - not the former landlord - is highly advisable. The rent increase should not be an issue. PM me if you prefer to discuss in more detail.
@Cory Lucas before buying the property with tenet, did you ask owner to provide details if the any of tanent are not current with rent or missed/delayed payment in last 1 year or so?
sometimes owner sell ,just not to deal with a tanent stopped paying rent.
@William Taylor dang, sorry to hear that. Sounds like you have a good lawyer and have been given sound advice. I plan on speaking with mine this coming week. Thanks for the time and reply
@Nick W. Graham thanks for the info and the offer to get in touch. Looks like you’re in my neck of the woods. Might take you up on your offer ;) Thanks for the time
You know what I did? I went to all of the inherited tenants and spoke with them about being the new landlord. So one tenant left the attic when he found out because he already knew by the past landlord. One tenant was evicted 2 months after and the last tenant told me that she was going to find another place to go to because the unit wasn't worth it with the new rent increase. The last tenant ended up leaving after school vacation started. But to let you know, I was already living in the property. The best thing was that I didn't have to move!