Advice for soon to be landlord

[Aiden Harris]

Hey all first time poster/long time browser,

I'm closing next week on a shotgun (duplex @ $2600/month mortgage) next week. Each side is a 2bd/1ba, with full kitchen, in unit W&D, front porch & backyard. Really lovely place. I did this through the FHA program, did 3.5% down. I plan on owner occupying one-side to satisfy the fha requirement, and I have carry over tenants from the previous owner (Who are great!). They've verbally agreed to a rent increase to 1400 for their 2bd 1ba unit, and I've got the contract coming together for after closing.

The only hitch is they are in the market for a home, but they could not afford to buy the place they currently live in that I just bought. Real estate is pretty pricey here in New Orleans, and I suspect it won’t be a quick occurrence. But it isn’t possible they find a place in a month & close.

Basically, how do I mentally prepare myself for their potential moving? I wanted them to go long term but they seem more set on going month to month time being and agreeing to the rental increase (12%) to a monthly rent of $1400.

Side note: this property would cash flow if I was not occupying the other side. As market rate (based on comps) appears to be $1500 (appraisal stated) per unit.

Thanks in advanced for your time.

[Robert Leonard]

If you use the ABCs of houses and neighborhoods, it's all made up. You can call it whichever you like.  Those terms get thrown around here on BP like they mean something, but outside of commercial real estate, it's all made up. Even in commercial real estate the classes are sometimes complex to understand.

Alternatively, if you stick to the numbers, like rent rates and property values, that is easily verifiable and is less subject to arbitrary preferences.