Looking at a 1960's Duplex on the island - it's been updated inside so no need to renovate. Also won't be living in either unit - I've got one side vacated but the other has tenants that are $400-$500 below market rate. Deal only makes sense at market rates on both sides. Anyone know of any options or is this a dead deal with the new rules passed last year protecting against rate increases
It might be a bit tricky, but you can always raise the rent, the maximum amount each year, in hopes that the people move out. My friend has about a dozen units, and raised rent on 4 of them last year, two of the tenants moved out because of the rental increase. If you can try to float the deal, unit you can get the rent up, it might be worth it still. There's always the keys for cash solution too, offer them three months rent to leave. A lot of the time, they go for it. A bit of a cost up front, but you get it back fast.
I write into offers that the seller terminates the current lease. With the property vacant, I'll do some basic improvements and put it back out onto the market. Only downside is it adds 2 months to the closing date as the landlord is required to give that much notice to the tenants. I have one deal in that state right now and have closed 2 other deals while waiting for this other one to close.
I say, "Vacant Possession – demand it."
My client says, "But wait, we’re buying the property as a rental any ways, so it’s a good thing that it already has a tenant… right?’
I say, "No, an existing tenant is rarely a good thing."
- How is their lease written?
- Does it protect you?
- Are rents reflective of current market rents?
- Is there a provision for annual rent increases?
- Your costs will be increasing every year, cover yourself.
- What is your duty for notice to evict the tenant?
- Why is the seller refusing to give simple notice?
Don’t risk inheriting the seller’s errors and/or headaches.
Whether your new purchase is meant to be owner occupied or an investment property, demand vacant possession or walk away.
It's tricky to vacate tenants in BC, if the property needs work you can vacate tenants if renovations make the property un-liveable.