Buying home to live in with current tenants

[Matthew C.]

Hi.  I am new here to BP.  I am in the process of buying a home that currently has 3 tenants living in it that would like to stay and rent from me after I take ownership.  I will be meeting with them soon to learn more about them and their situation but was hoping I could get some advice on how to handle this type of situation.

I plan to move into the basement of the house to have my own space while the tenants have the rest of the house.  My plan is to have my own bathroom, small kitchen, and washer dryer in the basement so I can remove myself from the renting tenants.  I will also have my own entrance to the basement from the back of the house.  It will take me a few months to get things the way I want them in the basement so I would be sharing the kitchen, bathroom, laundry until then.

Allowing the current renters to stay is obviously the easiest way to approach this, rather than finding new tenants, but do you think this is the best way?  If I should get new tenants, would you advise having the currents tenants leave before I settle or wait until after I fix up the basement to find new tenants?  I will be the new guy, even though it will be my house, so I want to establish a firm dominance from the start.

Also, as far as utilities do you recommend a split between the 4 of us?  Is this normally a separate payment or added to the rent amount?

What kind of agreement should I draft to secure myself?  I believe the seller has had one of the 3 tenants and having them work out the other details.

Thanks and appreciate any advice or opinions.