Switching Property Management Company After Purchase

[Stephen B.]

I am in the process of making an offer on a tri-plex in North Carolina that is fully rented with a Property Managment company in place. In the past, I have bought non-rented properties and when I found a renter, would use my preferred PM company. One tenant is on a 12-month lease, the other on a month to month and I plan on raising the rent of those on the month to month by 10%. Any advice on the best way to transition to my preferred PM company? Possibly a timeline giving everyone time to adjust?

[Will Gaston]

@Stephen B. I'd recommend checking with your preferred company and see what they have to say on the transition as they've likely done this hundreds of times. I wouldn't mention the new shift to a different PM until after the closing. Things can fall apart for a variety of reasons and you don't want to confuse the tenants if that were to happen.

I like the idea of giving the tenants a month or two to digest the bad news of a rent increase, however this often gives the M2M tenants a reason to go find a new place. Just be prepared that they may happen. 

May not be the worst thing to happen if their rents are under market.