Inheriting Tenants - Things to look out for?

[Brian Dickerson]

We are in contract for our first duplex in the Rochester NY area.  There are tenants placed already with leases into early 2019, but we may switch management companies.  This is our first go around...is there anything specific you guys look for when inheriting tenants? Certain things in the existing leases, etc?  

thanks!

[Penny Clark]

@Brian Dickerson, You almost always have to re-train (yes, retrain) inherited tenants in your way of doing things, whether the property has been managed by the owner or another property management company. Hopefully, you already asked to see the following items:

- lease agreements (look for: special maintenance clauses and what items the tenant is responsible for repairing if any, late fee dues and dates, security and extra deposits, what the owner pays vs what the tenant pays for utilities, landscaping, pest control, etc)

- payment ledger

- notices given (if any)

- copies of annual inspection reports

- Estoppel Certificates (show rent, amount of security deposit) if you do not have an agreement

You will need the current property management company to also provide you with current tenant contact information, keys to the unit, and any paperwork listed above. If the property management company is performing satisfactorily (collecting rents on time and issuing notices promptly if tenant is late), handling maintenance requests in a responsive manner and doing regular inspections, there may not be a need to change companies. You'll want to be familiar with the lease agreements so you can call the manager on any term they are failing to enforce.

If you are local, you may choose to manage the property yourself and save the fee.

Good luck and congrats on your purchase!