How to take over a property with tenants in place?

[Tim Marshall]

Just closed two duplex' yesterday that are fully occupied. I don't know much about the tenants except what the disclosures stated. I want to put all tenants in the best situation to succeed in the property. Two are month to month and two are under lease till October. My question for all of you is three fold.

1. What are your procedures for taking over a property with tenants in place? 

2. What should I do with the tenants that are month to month?

3. Any things I might be overlooking?

[Nathan Gesner]

1. Give them an introduction letter with you as the new owner. How do they pay rent, how do they report maintenance, and anything else you need them to know. Keep it short and professional. At the same time, provide them a simple form to fill out with current names and contact info of all occupants because the previous Landlord may not have tracked/provided this information. Finally, I schedule a walk-through inspection within one week of purchase. This is an opportunity to meet the Tenants personally, document the condition of the home so you have a starting point (I use pictures), and see if they have any complaints, questions, or maintenance issues.

2. If they are at market rate and you want to keep them, keep them on a month-to-month to see how they perform as Tenants. If everything looks good after 4-6 months, I would lock them into a one-year under my lease. 

3. There are many considerations. How are they maintaining their respective units? Do you have proper security deposits? Did the previous owner screen them and provide you with that information? Are they below market rates and due for an increase? If so, can they handle an increase or should you terminate their lease and start fresh with tenants you've selected? How strong is their current lease? Who's maintaining common areas, lawn, etc? Is there any maintenance issue that requires immediate repair?

My #1 recommendation: buy "Every Landlord's Legal Guide" by NOLO. It's full of practical advice and - more importantly - links you to your state laws.