Tenants want to stay after purchase

[Sandhya Gorman]

Hi,

I just bought my first investment property in Boise, ID!  The house is currently occupied by tenants who want to stay in the house until they find their own house to purchase (they were supposed to move out June 30th, but asked if they could stay until they found a house).  They are paying slightly under market rent rate.  That said, I'd like to raise the rent by $25-$50 per month and put them on a 12 month lease with the condition that if they found their home, they can move out once we find a replacement tenant (and we would focus on securing a new tenant ASAP).  

I would love some insight from this group as I am new to this and want to do the right thing!  

[Brendon Pishny]

That sounds fair but I personally would give them 2 options. Maybe extend for 1 month through July so they can find a home or they sign a 12 month lease at the new rent rate. I would hesitate to give them the option of canceling the lease if they find a home. Make them decide now. Chances are they’ll leave you with an empty unit in the winter when it’s harder to fill. Just my advice.