Month to month leases and security deposits

[AJ DeSimone]

I'm a couple of weeks out from closing on a 10 unit property. The deal is great, with amazing financing terms... it will cash-flow on day one. My only concern is 60% of the leases are month to month (some have been month to month for 2 - 3 years and way under MR), and I don't have proof of unit condition prior to each unit being rented. In my mind, this will make it difficult for me to make a case of keeping their initial deposit if the unit is trashed.

My thoughts were to slightly increase rents 3% - 5% and have them complete a conditions report prior to renewing a 1-year lease. The market is in my favor.

If anyone has come across this in the past or has any insight on a better approach, I'm all ears! Thank you!!!

-AJ