Purchasing a property with tenants in place

[Kole Kingslien]

Hello everyone! just had some quick questions. I am close to purchasing my first 4 unit property which I will live in, and there are already tenants in place, does anyone have advice and resources for inheriting tenants, how to start switching them to my policies, adjust rents, and so on? Also I am very young (22), and worried about being resented/not being treated with respect. the place is in a decent, but low income area, if that makes a difference. Any advice and resources is appreciated, thanks!

[Bettina F.]

Landlording is 99% a mental game.  Just because you are a new, young LL does not mean you need to look and act like one.  You have done your homework, right?   I want you to project an image that this is your 10th rental property, and that you have been LLing for YEARS.  (In case someone asks, yes, you look young, but you started working for your uncle, the attorney, when you were 15.  He has multiple properties and has been a great mentor!  Get it?)

Get some business cards printed.   Make a logo and letterhead on your computer.   You may want to have a name pin made.  Write your new owner letter on your letterhead, and after closing, hand deliver your letter with your business card to the tenants.    This is just a brief first introduction.  Tell them you will be meeting with them in the coming weeks to  do a maintenance inspection and go over your rental agreement with them.  

Have tenants sign YOUR rental agreement (printed with your logo/letterhead) with your rules during the maintenance inspection.  Keep your month to month tenants on month to month.  Keep the lease dates and  rent the same for your tenants on leases.   Rent and lease dates are all the tenants care about.  Give notice of reasonable rent increase to your M2M tenants.  Transition leased tenants to M2M as leases are due.  Low income tenants tend to break leases anyway, so keep everyone on M2M.

Expect to have lots of maintenance requests, which you will do your best to attend to.  As you enforce rules you will hear "Old LL never did it this way".  I responded "Old LL was not making any money.  That is why he sold the building".   Expect the inherited tenants to test you.  Tenants you screen and place will see you as the authority from the beginning.  Follow the rental agreement and enforce all rules equally.  Fair Housing requires this and it will make LL easier in the long run.  Remember, the tenants all know and talk to each other.   A pay or quit to one late payer will encourage timely rent payments from the entire building.

Be legal, be fair, be professional.  Fake it till you make it.  You will do fine.  Remember me when you are rich and famous.  I wish I had the guts and wisdom to start this at 22!