Taking Over Tenants in Oakland

[Eric Chang]

Hi BP Community ! I am a first time landlord and bought a duplex in Oakland. Each unit already has 3-4 tenants in there, some on the existing lease and some not. There is one long term tenant who subleases to other friends etc. Each unit is generating ~$2500 in rent a month so close to market rate, but I think I could get $3000 a month.  I will aim to increase by the 2.3% each year, but want to think long term. 

So my questions are as follows: 

1. When will I be able to raise the rent, when all original tenants move out?
2. What happens when I buy the property in regards to the existing lease, can I change anything about it if they are month to month?
3. As I take over the lease and the tenants, what is the best strategy to ensure that I will be able to get to market? Should I have all existing tenants sign the lease or just have one of the longer tenants sign in hopes they move out and I can start with a clean slate?
4. What are the pros / cons of letting tenants sublease?

Thanks in advance!

Eric

[Calvin Kwan]

You can only raise rent once a year, so find out when the last time rent was raised.  If rent hasn't been raised in a while, you can bank past year's rent up to 5 years, I believe.  Find out as that can help you get above 2.3%.  

I don't think you can change anything on the lease as it may be seen as a reduction of service.  If that's the case, they may have a case of rent reduction.  That may be different on month to month, but I don't think so.  Tread carefully here and check with EBHRA.

If your intention is to sign a new lease with the tenants, I would make sure everyone that is staying in unit is on the lease for accountability.  Even if they're not on the lease, if they've lived there for over 30 days, they're considered tenants and have full rights.  Might as well get everyone the lease, get everyone on the same page and go from there.  Unless you have other plans for the units?