Closing on a deal, want to remodel but have a tenant

9 Replies

My wife and I are about to close on our first investment property. We are doing a house hack and want to remodel the side we are not living in at first from floor up.

The tenant that is living there is on a month to month lease under the current landlord. My wife and I will not be doing month to month leases either 6mo/1yr leases.

How are we able to get in there and remodel the tenants unit if they do decide to sign our lease and stay another year?

Do we have to wait until that year is up to remodel?

Can we firmly “demand” we are doing a remodel once we close on the deal?

Can the current landlord deliver the unit vacant? 

I'm not sure if Kansas is a landlord or tenant friendly state, but 30 days notice to vacate on a month to month lease is fair. If you are offering them a lease, then I think you'd have to wait until the unit is vacant to remodel. Why bother going through that hassle while a tenant is already living there? If the tenant is shrewd, they may ask you to relocate them while the unit is being renovated. 

Ideal situation would be to get the unit vacant, but if you're offering a lease, wait until the lease is up, and the tenant out, to do your renovations. 

@Alexander Johnson If they're on a month-to-month lease, why don't you just give them notice you will not renew their lease? Then, when it's vacant you can begin your rehab. 

You can rehab while the tenants are living there, but landlords rarely do it. It doesn't make a lot of sense in most situations to rehab a unit while it is occupied. One of the many benefits of rehabbing a unit is the ability to increase rent afterwards. It's very possible the current tenants will not accept a $200-500 rent increase. 

I don't understand why you want to lock them into a longer term if your real goal is to go in and renovate? It's very difficult to renovate with an occupied rental. 

I would keep ask them to sign a 120-day extension, keeping the rental secure through winter. Let them know you need the unit vacant at that point for renovation. Complete the renovation and then find a one-year renter at a time when the market is heating up.

Originally posted by @Alexander Johnson :

My wife and I are about to close on our first investment property. We are doing a house hack and want to remodel the side we are not living in at first from floor up.

The tenant that is living there is on a month to month lease under the current landlord. My wife and I will not be doing month to month leases either 6mo/1yr leases.

How are we able to get in there and remodel the tenants unit if they do decide to sign our lease and stay another year?

Do we have to wait until that year is up to remodel?

Can we firmly “demand” we are doing a remodel once we close on the deal?

Provide notice of non renewal. If you are nice you can give them 45 days or 60 days depending on your understanding of the renters and their quality. 

 

I would like to know the numbers of the current rent and what you plan to charge after the remodel? You maybe able to bump the rent and get a year long lease if the renters want to stay. You can put away the money for repairs or buy another property. 

@Alexander Johnson  Given the time of the year that we are in, It is best to close on your home, start collecting rent through year end & then give the proper notice to vacate per your state/local laws. Spring is good time to start a remodel for a May/June re-rent calendar as the market is traditionally stronger during this season. Remodeling a home while tenant's are living in the home whether you are firm or easy going always leads to some problematic situations that you will not have to deal with when renovating a vacant home. Review the lease you are inheriting, put together a budget of what you plan on invest for capital expenditures, study the market for what the home can rent for with the renovations & move accordingly. Good luck- Edward

@Jon Morgan The side with the current tenant is a 2bd/1ba renting for $600 a month. The property is real outdated but once we're done with the renovations were looking to make the rent anywhere around 760-800 depending the local average rent for the area.