Purchasing rentals with current tenants

[Levi Hannon]

I’ve seen a lot of potential rentals on the market that currently have tenants that would like to stay. Obviously this makes life of a future landlord a little easier to start, but if the numbers don’t make sense at the current rental rates, does anyone have suggestions on how to increase rent on current tenants as a new landlord or how to handle that situation in general? Thanks in advance!

[Michael Dumler]

@Levi Hannon the lease transfers with the sale of the property. As a new landlord, you simply can't raise rents if the tenants are on a fixed lease. I would establish when the lease is set to expire. If the lease isn't up for a whole year then the deal may not be worth pursuing. However, if the lease is set to expire only in a couple of months, then run your numbers accordingly and determine if the holding period is worthwhile. Hope this helps!