When and How to Engage Adopted Tenants After Closing

[Jonathan Lake]

Hi Everyone - This is the first time I am purchasing properties with tenants. So, here is my 'ask for help'

If you self-manage (or even have a PM), when and how do you connect with the tenants you have now adopted post-close? What do you say, do, etc?

I was doing a pre-tour of a property I am closing on tomorrow and the owner told me that the tenants in the 5-unit aren't aware the property was for sale or sold. It was a bit uncomfortable having the owner tell the tenants I was there to do an inspection of their apartments.

All feedback welcome. Thanks in advance.

[Jennifer Beadles]

@Jonathan Lake I've purchased many properties with tenants in place, and it's always a little tricky having those conversations. What I've found works best is chatting up the tenants at the inspection, mostly because I want to determine if I want to keep those tenants. I usually introduce myself as the new potential buyer and ask how things are going and let them talk. If they start complaining and pointing out a lot of issues and have any hint of drama, I will either make it a condition of the sale that the owner have them vacate prior to closing, or I give them a 20 day notice as soon as I can (if they are month to month).

In your case, I'd probably call the tenants (make sure you get their info from the owner) and let them know that you are the new owner and that you'll be mailing out a notice to them for where to send rent payments. Let them know their security deposits will transfer to you as well. 

Are all of the tenants in leases or are they month to month? Do you plan to do any rental increases or changes to the lease? The tenants are going to be most concerned about their rental rate if they are on month to month along with knowing if they can stay or not so be prepared for those questions to come up.