Rental Property Investor · Danbury, CT · Member since 2016 · 17 posts · 1 vote
Hello Everyone
I would like to get your opinion on how to best handle an investment.
I am purchasing a Condo as an investment but there is an existing tenant who has been living in the condo for 5 years on a month to month basis not a contract. Another down side is that He is paying $700 and current rents goes from $800 to $850 a month.
What would you do in this case? And how to screen a tenant in this situation?
Thanks in advance for all the wisdom you provided.
@Sergio Velazquez month-to-month might work in your favor in this situation! I'd give them two options, both with 30 days notice: 1) Notify them that rent will be increasing to $850 and a 12 month lease is required OR 2) if you are okay with them staying month to month, rent will increase to $900 for a month-to-month lease arrangement.
Whatever the number you choose, just make sure that your MTM rent is more than your LT rent option. These two options are sure to send the tenant running but just be prepared for rebellion, resistance; they may not want to move since I'm sure they know they're underpaying.
You may have to consider a creative strategy to get them out like a pay to leave situation if they resist: offer to pay for the moving truck or application fee for the next place or even give them the last month for free...anything to get them out and get your unit up to market value so you can maximize your cash flow.
A few points to note before you take action - be sure your area doesn't have any rent controls or laws restricting landlords from raising rent. Confirm if there is a written lease and ensure you comply with the terms.