What would you do? - Triplex situation

6 Replies

I have a client who will be moving into a triplex soon. 2 units are month to month and 1 is on a lease. All the rents are below what they should be. All units are similar size and condition (not great, but livable). 

How would you tell one of them to leave? Would you take the worst unit and fix it up and move in? Would you take the best unit and fix up the worst to get higher rent? Would you tell them whoever pays the highest rent can stay?

The tenant on the lease is staying, so that leaves the 2 month to month tenants. Since your client is moving in, I would suggest meeting both of them and figuring out which one will be lower maintenance/less stressful to live around. The other can be given notice the lease won't be renewing. 

I would not have a survival of the highest rent bidding war. That might create resentment for whichever tenant ends up staying.

Choose the least desirable of the two on M2M to get rid of. When the unit is renovated move to the next tenant and rent the renovated unit at the new market rate.  Once the tenant on lease expires keep them on M2M until you are ready to move to that unit to renovate.

How would you decide whom is the least desirable?

Originally posted by @Matt Carey :

How would you decide whom is the least desirable?

You could interview them, inspection the condition of the units, and take an application looking at credit, employment, income, criminal history, eviction history, etc.

You just can't base a denial on any protected classes under Fair Housing laws:

  • Race.
  • Color.
  • Religion.
  • Sex.
  • National Origin.
  • Disability (added in 1988)
  • Familial Status (having children under 18 in a household, including pregnant women) (added in 1988)

I appreciate the feedback. If my client asks, I tell him what the community thinks. :D

If it's possible, I would do a live-in rehab in the cheaper unit. However, most importantly I would focus on the two current tenants and which one I would prefer to have stay. Tenants are so important especially for small multis like a triplex. Vacancy and turnover can easily eliminate all cash flows for a year.

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