Arlington, VA · Member since 2017 · 14 posts · 3 votes
I am thinking about buying a rental property that is setup as two units. There are already tenants in both units and the listing says that they want to stay. How do I handle the transtion? Do I make them sign a new lease with me and should I do it at the day of settlement? Do I have to honor the lease that they had with the former owner? Should I run another background check and check references. Any suggestions or wisdom on this process is welcome.
Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes
9y
I always try to get them onto my lease. You have to honor the current lease. What I usually tell the tenant is I like to have everyone on the same lease so I don't get confused. I ask them to sign my lease with the same rent, same deposit and same terms as far as length of the lease. That then gets them on the lease with my verbiage so I can reply with some sort of confidence when they ask questions without having to review every lease.
Investor · Indianapolis, IN · Member since 2014 · 208 posts · 137 votes
9y
Hey Erica. At least in Indiana, you have to honor the existing leases. If you want the tenants out, you'd have to buy them out or wait until the end of their lease. But I'd suggest giving a local lawyer, property manager, or someone like that a call to see what things are like in your area.
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
A property that's rented out shows income on balance sheet that you'd take in when you apply for loan, so it's not a bad thing to be able to have that already established from DAY 1.
The current lease and security deposit would transfer over to the new owner within the terms of the purchase / agreement. So depending on what type of term the lease is, would determine when you would be able to give notice of renewal, new lease terms that you then could start with proper notice.
Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes
9y
I always try to get them onto my lease. You have to honor the current lease. What I usually tell the tenant is I like to have everyone on the same lease so I don't get confused. I ask them to sign my lease with the same rent, same deposit and same terms as far as length of the lease. That then gets them on the lease with my verbiage so I can reply with some sort of confidence when they ask questions without having to review every lease.
Investor · Virginia Beach, VA · Member since 2016 · 22 posts · 6 votes
9y
Deanna, that was a good point I had not thought about. I had the option to purchase a duplex last year but they had tenants in them. With the loan I was using, I had to reside on the property and did not want to kick anyone out knowing one of them were month to month.
Investor · Virginia Beach, VA · Member since 2016 · 22 posts · 6 votes
9y
Deanna, that was a good point I had not thought about. I had the option to purchase a duplex last year but they had tenants in them. With the loan I was using, I had to reside on the property and did not want to kick anyone out knowing one of them were month to month.