Questions from a soon to be new landlord

[Tarcizio Goncalves]

Hi everyone,

I am getting ready to close on my first owner occupied 2 family. This will be my first time dealing with tenants. I was wondering if people can help me out.

Because the tenants on the second floor have a lease until 9/30/17, I will inherit them. I will be moving in at the beginning of August. According to the current owners, they are good tenants and always pay their rent on time. Because the seller doesn’t live in the property, they allowed a few things that I am not a fan of. So far, they are allowing the tenants to:

• Park a crashed vehicle on the driveway for an undetermined amount of time
• Allowed the tenants to add their own washer and dryer in the basement for their use (1 washer and dryer per apartment). My goal is to add coin operated machines so that I can get some help with the water bill.
• The current owners split the basement in half and allowed each apartment to use their section in the basement as storage. There are a lot of stuff in storage from both units down there. One half will be emptied since one unit will be vacant at the time of closing
• I’m sure I will find more while I am living there but this is what I observed so far.

I’ve heard more than once on the podcasts if a person wants to be a successful landlord, he/she needs to be an a-hole. Is there truth to this statement? That is not me and I cannot see myself being this type of person.

If these tenants turn out to be great tenants, I would love to renew their lease in September, by giving them another 1 year lease. They are a young family with an infant and a toddler. If I keep them for another year, I can save with the turnover costs. I would love to hear from you all on what that first conversation should be. I probably can’t ask them to change what I mentioned above until they renew the lease with me correct? What things should I say? I will definitely tell them that this is a family home so drugs, loud parties, drunk people, bla bla bla will not be tolerated. Anything else I should mention?

One more additional question, I’ve heard on one of the podcasts someone mentioning a book that gives landlords a bunch of systems to put in place to have fewer calls, fewer times doing maintenance, etc. Would anyone happen to know what book this is?

Thank you all for all the help in the past few months. 

[Phillip Faries]

Congrats on the new venture!!!

Inheriting tenants isn’t necessarily bad. Have you listened to the latest Bigger Pockets Podcast? @Meghan McCallum touched base on this. This is a business relationship and their these actions could/are affecting your business. As the new owner you should go in and set expectations for them to continue living there going forward.

Regarding your bullets, I too am facing the same thing now (inherited tenants) as I am going to be closing on a 2 flat (going to convert to a 4 flat)

After I close I am going to make it clear that I will be moving into the building once its renovated and I will be looking to make/take the building and over all living condition to a much higher standard. In order for me to do this I need your cooperation and thus the following changes will be made. In my case:

• Brand new coin operated laundry facilities (now its free but the w/d’s are on the verge of death)

• Fully renovated back yard – meaning your dog can’t use it as a bathroom any more without you picking it up…….

• Your items in the basement will need to be relocated as I am turning the basement into a gym/laundry and another apartment

• Both their units will be renovated with new kitchens and baths. (once the basement is done, I will have them temporality moved there, should they wish to stay)

Once I paint the picture of how I am trying to make the building better they should get on board, and if they don’t, come 9/30, non-renewal there lease.

I don’t think you need to be an A-hole, I start my relationships with my tenants very cool and calm and simply layout the rules in my lease addendum. However, there have been a few times where I’ve had to get aggressive and the tenants reaction is like “crap, he’s never like this….. maybe I’m in the wrong.” (mainly pets or painting the walls). Be fair but hold your ground per your lease, it’s your greatest tool in telling them no, but also your enemy if you do it wrong.

Saving turnover cost is great, but I bet your nervous about having to find/pick a new tenant should you non-renew. (better to deal with the devil you know kinda thing) However, if they leave this maybe a good thing, fix up the inside to get more rent or if rent is below market, now is your opportunity to get the rent to market levels. BP has a greatt tool for finding new tenants, a yes/no system which I use and haven’t had any issues finding a tenant that works for me.

Sorry I don’t recall the book but I’m sure someone on here will!

Again good luck and welcome to the team!!!

Any questions just PM me.