New to Real Estate · New Holland, PA · Member since 2020 · 4 posts · 0 votes
I’m in the process of purchasing my first property. I need it to be a house hack and am coming across properties with a ton of potential but currently fully occupied. I am struggling with the idea of kicking someone out of a unit so that I can move in. I’m sure I’m not the first one with this internal struggle. Would really appreciate some insight on how others have handled this situation.
Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
5y
@Fabian Enrique Mejia What is the length of their lease? You are not kicking someone out, you are simply not renewing the lease. Obviously don't be slumlord and act in a professional manner to help this individual anyway possible in the transition. I assure you they will find another home and learn something about themselves, the experience and grow in the process.
However, in the end like it or not, you've become a business owner of a business plan in a investment. This means you have to make decisions to support the business plan which are not emotionally driven. Some people won't enjoy that perspective but that is why some people aren't in business :) . It might sound cold, but if you rent and invest emotionally, it will eventually get you in trouble. In other words, are you worried enough about this tenant not finding another rental that you will risk losing on your investment or delay your financial goals?
I recommend having a sit-down with the tenant. You can be perfectly honest and tell them the situation. You can even perhaps share that you will be renovating or improving the unit to increase rent. Or simply let them know at lease renewal rent is being increased. Depending on the increase, this alone can be incentive. I still recommend having the talk as you will be moving in the unit.
You can even just have a talk with all the tenants and bring up the subject of lease renewal, rent increases to gauge which tenants are happy with the property or who would be most likely to not renew anyway.
If you don't feel good about these kind of talks, perhaps bring in a property manager to do the work or speak with the tenants. Many like to take this approach with success.
New to Real Estate · New Holland, PA · Member since 2020 · 4 posts · 0 votes
5y
@Chris Levarek This is all great advice. Thank you for taking the time to share your thoughts on my situation. I agree that these are tough decisions I’ll have to become comfortable making to make sure my investments work in the long run.