All Forum Posts by: Connor Kerr

@Connor Kerr

It depends what their current lease is. Is it month to month or does it expire on a specific month?

Once the lease is up I would definitely screen them to make sure they fit my criteria before I continue renting to them. Also judge them on how good of a tenant they were during their previous lease.

 I had the exact same situation on one of my rentals that I closed on in Aug 2020. I was given their lease, PM company gave me a check for security deposit that they originally had from their lease and difference of August rent as well as the payment they already made for September rent. Their lease didn't expire until July 31,2021. They asked to renew this year, which worked out okay since COVID affected the local university students' desire to even sign a lease as many were and still are trying to get rid of their leases.  With that being said, my tenant is a contractor so in return for rent not being raised, he's repairing things in his property as well as the one we are house hacking in the same neighborhood. 

So, first make sure you are completing the duties of their current lease. Then inform them now or 90 days prior to their lease expiration date  your intentions to increase rent.  

Be a good landlord,  give them plenty of time to work things out on their end. Moving is stressful and if they have been there for a very long time, 90 days is plenty of time to prepare,  research and pack up. If you let them know now, maybe they'll find something even earlier.  Which in turn may allow you to find a new tenant sooner at higher rent.

Here's another example from personal experience of tenant needing to get out of lease:  A gentleman contacted me, was very honest about his situation.  He and his wife were separating but he didn't want to sign a yr lease. Considering my unit was vacant and a weird time to get a renter, I agreed to  Mar-Oct. I told him if things got better, I would do my best to find new tenants. I knew deep down that by July or August,  he'd know if things would be finalized.  Sure enough,  July they did a family vacation and it went well.  He kept me informed so I immediately started showing the townhome and he and his wife put information out, too.  Sure enough,  I found a new tenant that moved in the 2nd of August. He's happy at home and I'm getting higher rent with new tenant. 

So, moral of the story...if you are honest and let tenant know intentions in advance,  it can go very well for both parties. Please keep in mind, our properties are considered class A so I may have less issues than say class C where it can be sticky.

Reviewing the lease should have been part of the due diligence for your investment.  But now that you're playing catch-up, review it now and see what it is you signed on for.  You're taking whatever the lease says you're taking now.

At the end of the lease it's up to you but I would get rental comps to see what market is for that unit.  If it's more than what they were paying during the lease period then you have a decision.  If they were paying rent on time, weren't trashing the place, and weren't causing trouble, I would go about a third of the way from previous rent to market rent each lease renewal.  On the one hand you want to get to the market rate for rent, but on the other with the eviction moratorium the entire world is starting to see rent payment as optional now so if they're paying, hang the f* onto them.  My two bitcoins.

unsure your laws but in iowa you must abide by any lease that is in place. If there is no lease and it is just month to month I may try to raise the rent a bit and see what they do and keep it month to month. They may decide to move out or if they do not pay just serve them notice to vacate on non renewal and go through the normal process. If the lease is longer term your answer may be decided for you as you will need to fulfill that lease.