Remodeling with Tenants in the unit

[Jennifer McElliott]

Hey all - this is the first time we're closing w/ inherited tenants... and the place is outdated and worn.  The tenants are both (this is a duplex) on month to month leases that are under market but I suspect that's also because the units aren't in tip top shape.

my questions are:

1.) do we remodel w/ the tenants still in the unit - and they just live through the inconvenience?  

2.) when folks inherit tenants, and you have them sign new leases with you - how have you handled this when you plan on upgrading their unit, don't sign a new lease until the remodel is done and resign at the new rate (if they can pay the new rate...?)

I guess the broader question is - how do most folks handle inherited tenants... i spoke to one of them while our inspector was going through the units and she sounded like she's been living their happily for the last couple of years while her neighbor has been there for almost 10 years now.  They both get along and seem to be nice people.  

Thanks!

[Lee L.]

@Jennifer McElliott I wouldn't remodel with tenants in the unit. It's a huge liability, and they will meddle with things. And if something happens to their stuff, then it's on you. It will also slow down the rehab which means higher costs for you. If I were in your position, I would raise the rents, and if they decide to stay, then great. If they decide to leave, do the rehab and raise the rents.