Tenant asking for an application on another property

19 Replies

Hi,

I posted a listing on Zillow and received an application from one of my current tenants asking for an application. He doesn’t know it’s my listing. We were just at the property last Monday for 4 hours doing repairs and landscaping and he was there the whole entire time talking to us and offering to help. He said nothing about moving. He continues to tell us that we are very good LL and appreciates us. I’m kinda wondering why he didn’t ask if we had any other vacancies. He is an excellent tenant and I don’t want to lose him but understand that people move on. Apparently he’s looking and I’m preparing myself for the 30 notice. He is month to month and has been a tenant for a little over two years. The advertised rent is $400 more than his current rent. His current rent is $125 below market. I’m scratching my head….

Do I:

1) Call him and say, “Hey, I see you requested an application for another property that I own…”

2) Send him the application and say nothing and let him figure out it’s me?

Has anyone ever been in this situation?

Thanks in advance.

M

@E.S. Burrell

Sounds like a great situation! Good tenant wants to increase rent at another property and allows you to bring your other unit up to market rent. I would approach it with a happy and friendly attitude and bring it up to him directly. Sending him the application without saying anything would come across weird, in my opinion. 

Is the new unit in a different location, larger, or better amenities? It is possible it has nothing to do with you and is truly just about the property. 

I agree. If this person is a good tenant, you definitely do not want him to feel “embarrassed” when he finds out that you own the other property as well. I recently purchased a rental property that is larger than the one my current tenants were living in (I own that one as well) and asked them if they would be interested in moving over and they jumped at the chance. They pay an additional $300 more a month now, but they love the extra space.

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Originally posted by @E.S. Burrell :
@Mason Hickman

The house is bigger than where he is living now and in a better area. Right, I don’t want to put him or myself in an awkward situation. 

You must be big-time owning all the rentals in town. :-)

Originally posted by @Joe S. :
Originally posted by @E.S. Burrell:
@Mason Hickman

The house is bigger than where he is living now and in a better area. Right, I don’t want to put him or myself in an awkward situation. 

You must be big-time owning all the rentals in town. :-)

 LOL!!!  I wish :-)… one of these days!!! 

Originally posted by @Sean Conklin :

I agree. If this person is a good tenant, you definitely do not want him to feel “embarrassed” when he finds out that you own the other property as well. I recently purchased a rental property that is larger than the one my current tenants were living in (I own that one as well) and asked them if they would be interested in moving over and they jumped at the chance. They pay an additional $300 more a month now, but they love the extra space.

 That’s a good idea! I was thinking from now on, I should give my current tenants first dibs on my vacant rentals especially if it’s an upgrade. 

Originally posted by @E.S. Burrell :


Do I:

1) Call him and say, “Hey, I see you requested an application for another property that I own…”

2) Send him the application and say nothing and let him figure out it’s me?

Has anyone ever been in this situation?

I manage about 400 rentals in a town of 9,500 people so I see existing renters inquire about my other rentals all the time, not realizing they are mine. You just have to learn that tenants are always going to look out for their best interests, not yours.

Personally, I wouldn't respond. Moving him out of one unit and into another doesn't benefit you unless the market is difficult. You have to deal with a new tenant at the larger house anyone, but moving your existing tenant would result in a second turnover, which is always going to cost you something. If it's fairly easy to find a tenant for the larger home, then find a new tenant for the larger home.

The good news? He's $125 below market and you know he's willing/capable of paying more! Sounds like someone should be hit with a rent increase at the next renewal.

Hi E.S.,

Take his app, if he qualifies and wants it let him move.

He might want a better location (for him) a bigger place (plans on getting married), better neighbors, closer to the Bowling Alley, less morning traffic on the way to the freeway, his dream neighborhood--who knows.

Then turn his existing unit and put someone it it at market rent--if it will hold market rent with good renter.

Pro Tip: On the way out, ask him Why he decided to move.

Maybe the new place has a tree that's just right to hang dead deer from while he processes them--who knows (???)

That's a Win-Win-Win for everyone.

This will only be awkward if you make it awkward.  You can make it comfortable and should try to do so.  I would talk to the tenant and see what's up.  If there is something he wants/needs and you can do it at the current house and bring it up to market value, great, then do it.  If not and moving is the only option, you seem to gush over the tenant so  you take the risk out of the large house by moving them in.  

By the sounds of it, they are moving or at least thinking of moving no matter what, so you might as well keep him if you love em.  

Are you in a financial position to turn the exsisting unit?

Originally posted by @Brian Armstrong :
Originally posted by @Max T.:

@Sean Conklin

So then you have 2 units to make ready instead of one.

 If the tenant is going to move out then you're going to have 2 units to make ready anyways.

Right. If it happens it happens. But o don’t go around encouraging current tenants to move into my other vacant units.  

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@E.S. Burrell If you say he is an excellent tenant, then why wouldn't you want to have him at your other property? I get that you don't want to have to do a "turn" of the property they are in currently... but the fact is that he might already be looking so you may be losing him to another landlord/property any way... Why not have him take your other place and keep his checks coming in?

Seems to me that it is entirely in your power to only have to look for 1 new tenant vs 2...

Originally posted by @Nathan G. :
Originally posted by @E.S. Burrell:


Do I:

1) Call him and say, “Hey, I see you requested an application for another property that I own…”

2) Send him the application and say nothing and let him figure out it’s me?

Has anyone ever been in this situation?

I manage about 400 rentals in a town of 9,500 people so I see existing renters inquire about my other rentals all the time, not realizing they are mine. You just have to learn that tenants are always going to look out for their best interests, not yours.

Personally, I wouldn't respond. Moving him out of one unit and into another doesn't benefit you unless the market is difficult. You have to deal with a new tenant at the larger house anyone, but moving your existing tenant would result in a second turnover, which is always going to cost you something. If it's fairly easy to find a tenant for the larger home, then find a new tenant for the larger home.

The good news? He's $125 below market and you know he's willing/capable of paying more! Sounds like someone should be hit with a rent increase at the next renewal.

 He looking so eventually he’s going to move. So I’m definitely going to raise the rent for the next tenant. 

Originally posted by @Scott M. :

This will only be awkward if you make it awkward.  You can make it comfortable and should try to do so.  I would talk to the tenant and see what's up.  If there is something he wants/needs and you can do it at the current house and bring it up to market value, great, then do it.  If not and moving is the only option, you seem to gush over the tenant so  you take the risk out of the large house by moving them in.  

By the sounds of it, they are moving or at least thinking of moving no matter what, so you might as well keep him if you love em.  

Are you in a financial position to turn the exsisting unit?

 Yes, house paid off;  my only ongoing obligations are property taxes and homeowners insurance. 

Originally posted by @Max T. :
Originally posted by @Brian Armstrong:
Originally posted by @Max T.:

@Sean Conklin

So then you have 2 units to make ready instead of one.

 If the tenant is going to move out then you're going to have 2 units to make ready anyways.

Right. If it happens it happens. But o don’t go around encouraging current tenants to move into my other vacant units.  

 I’m curious. Do you think it’s a bad idea to offer current tenants the option to move into another one of your other vacancies? I was thinking it was a good idea. What’s your take on it? I’m here to learn. Thanks! 

Originally posted by @Sunil Kurian :

@E.S. Burrell If you say he is an excellent tenant, then why wouldn't you want to have him at your other property? I get that you don't want to have to do a "turn" of the property they are in currently... but the fact is that he might already be looking so you may be losing him to another landlord/property any way... Why not have him take your other place and keep his checks coming in?

Seems to me that it is entirely in your power to only have to look for 1 new tenant vs 2...

 It’s definitely going to be stressful looking to  fill two vacancies since winter is approaching especially in Michigan. 

Originally posted by @E.S. Burrell :
Originally posted by @Max T.:
Originally posted by @Brian Armstrong:
Originally posted by @Max T.:

@Sean Conklin

So then you have 2 units to make ready instead of one.

 If the tenant is going to move out then you're going to have 2 units to make ready anyways.

Right. If it happens it happens. But o don’t go around encouraging current tenants to move into my other vacant units.  

 I’m curious. Do you think it’s a bad idea to offer current tenants the option to move into another one of your other vacancies? I was thinking it was a good idea. What’s your take on it? I’m here to learn. Thanks! 

Yes I would not offer current tenants the option. If they respond to an ad I'll deal with it. But when a current tenant wants to move into a soon-to-be vacant or vacant unit it creates a 2nd vacancy when I originally only had one. 

Yes I only have to vet one tenant (since I already have a presumably good one), but I still have to hire my crew to paint, deep clean, possible yard work, miscellaneous repairs. Depending on the unit I may also opt to complete any other number of upgrades like add AC or refinish floors. 

It just creates more work and more expense with no real upside. Plus I use vacancies as opportunity to increase rents. The current tenant most likely won't want or be able to pay too much more than they are already paying. I've been able to increase rents lately so an existing long term tenant's income would likely be a limiting factor.