Protocol for inheriting tenants

[Curran D Bishop]

I am closing on a small multi-family at the beginning of June. It is a house with three accessory apartments: we'll be living in the main house and keeping the three existing tenants who currently have month-to-month leases. What is the protocol for beginning contact with inherited tenants? My intention is to not initially increase the rent, make some improvements to the efficiency of their HVAC systems (go from ancient oil to high-efficiency gas) and, once I have the work done, increase the rent to compensate. So I'm thinking of keeping them month-to-month until the work is done, and I also want to let them know how I'm planning to proceed going forward (i.e. I'm not going to ask them to leave when their leases are up, increase the rent immediately, etc.). How have you all proceeded in similar situations?

[Randall Weatherall]

Since they're month-to-month, be prepared to do two things:

1. Let them know your plan with the units and how you expect to alter/better them when you take over 

and

2. Lose them as tenants.  Depending on how long they've been there, they're likely not too keen on having someone come in and do a bunch of work while they are still trying to live there and that's completely fine as long as you let them ,now up-front what you're planning to do.  Explain it in the nicest light possible and you might just get to keep one of them if they can handle the increase, but if it's a huge difference between current and market, then it's likely a good idea to get them out and do the work and remarket as a higher-class unit and try to find new people.  Remember: these will be your neighbors soon.