closing first property with tenants already in place - now what?

Question

all the properties I have closed in the past where always vacant - i bought, rented and started with new tenants, etc

I'm closing a duplex tomorrow - with tenants already in place - suggestions on how to make transition set expectations, etc

best way to make introductions, review lease, ? sign new lease, how to set expectations, when to raise rents - etc ?

many thanks

jack

Thomas S. · Answer

You first need to know what their lease states and what the state regulations allow.

Otherwise treat them exactly as if you were screening applicants to place in a vacant unit. They are not entitled to any special treatment beyond their legal rights. Raise the rents immediately to market providing you are allowed and simply tell them everything you want them to know and how it is going to be. Rip off the band aid lay down the law (rules) and see how it goes.

There really is nothing special about it but most landlords usually screw it up by not stepping up to their responsibilities immediately upon taking on a new property. For some reason they are afraid of facing inherited tenants or treating them as they would any new tenant. They tend to go in soft, lose potential money on rent and generally allow the tenants to control them because the tenants were in place. This is the reason so many inherited tenants turn out bad.

I prefer the all business all the time approach.

Account Closed · Answer

Agree with Thomas S.  If there is a lease already in place, you have to honor it.  So, I wouldn't try to get them to sign anything new because they can just say no.  You don't want to end up in a position where you had to back down.  Not that you would be a jerk landlord, but even if you're pleasant, you are better off keeping your relative position of power as their landlord.

Then, just send them notification that the property has been sold to you and where they are now to send their rent.  I'd also include a day and time of an inspection, and to let you know of any maintenance issues they are concerned about.

Otherwise, just proceed as you normally would.  And be aware that inherited tenants are often a PITA.  They will be afraid of new management, afraid of their rent being raised - and how they usually deal with that is to start complaining about all kinds of stuff, hoping those complaints will result in you not raising their rent - or to establish some type of hold over you (as in bullying).

I suggest if they start pulling that stuff, that you have some pat answers ready.  I liked "That's not in the budget right now, but we'll keep it in mind."  "I can see you're unhappy here, so I'll understand if you want to move.  All you have to do is give 30 days notice in writing."  Etc.

Kathy Johnson · Answer

Ask the seller for paperwork (like the move-in checklist for the tenants) copies of leases, proof of disclosures (like the lead paint disclosure/signature acknowledging receipt of the epa booklet, etc)

Make sure the tenant deposit(s) are transferred to you.

Matt Turbitt · Answer

you should listen to BP podcast 179 it's great for stuff like this from a guy who came from a collections world into rentals.

Rich Baer · Answer

Don't forget to pray that you don't have any lead paint issues. Just because you did not put them in doesn't mean you don't have liability.

closing first property with tenants already in place - now what?

Most Popular Reply