Inheriting Tenant on first purchase

[Johnny Alvarez]

Hello BP,

Finally did it. Pulled the trigger and now I am 5 days from closing on my first property! It is a duplex in Chicago, with a long term tenant already occupying one of the units. The tenant has been there for several years, and is M2M with rent being slightly below market (Not by a lot) so I am more than happy to keep status quo, at least for the short term to cut vacancy costs to start off.

My question is the following: How does the change of ownership transition process look like after closing for a new Landlord in this case? Does one just simply knock on the door, introduce oneself and say "By the way you gotta change name in the check" or is it a little more involved than that? I believe my attorney mentioned some document I will receive at closing that I need to copy and present to the tenant to make it legal but other than that I'm not to familiar with how to approach this and wanted to hear from your experiences.

This has a been a very exciting process and I am very thankful for this community. It has helped me overcome doubts and anxieties that come from being new and unexperienced so Thank you.

[Gary Nelson]

@Johnny Alvarez Congratulations on buying your first property! This is pretty simple and straightforward, but is very important because you're kicking off a new relationship. My advice to folks in this situation is this:

1. Knock on door, stand 6 ft back, smile and introduce yourself as the new owner

2. Remember that the tenant is likely more nervous than you are, i.e. Do they want to kick me out? Do they want to raise my rent? Will they like me?, etc.

3. Keep the conversation extremely short. I know, there's a lot to discuss, so what I did was type everything up (similar to a FAQ page) and hand them the piece of paper, and say "here's all the new information you need to know, I just wanted to stop by really quick and introduce myself personally and wish you and your family a merry christmas! If you have any questions, that this paper doesn't answer for you, just give us a call - thanks!" The reason I do this short and sweet is it can easily turn into a long tenant wish list of what needs fixed. I let them know that I don't have much time today, but please submit any maintenance request to X and we'll take a look at it very soon.

4. The absolute easiest way to do this is to have your property management team handle the transition. They do it all the time and it's not too late to hire one, which I recommend now that I'm on the other side of the fence - it's worth the expense, in my opinion.

5. If you're asking these questions now, you're going to be a good property owner. The fact that you care enough to go in-depth about a routine PM task is a great example of your character and values. Good luck to you.