Just purchased property, tenant wants to move out.

Rental Property Investor · Kansas City · Member since 2018 · 43 posts · 34 votes

I have just purchased a quadplex a week ago and a tenant is wanting to break her lease. She is in the biggest unit that rents for the most ($925). She wants to leave because her sister is no longer helping her with rent and she is struggling financially. My plan was to save this first year and renovate the units as people move out but with her moving out this soon I am worried I can't renovate it the way it should be done and not get it rented. She had just signed a year long lease in September. I am house hacking this property and living in the unit next to hers. Any advice for how to handle the situation?

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Kyle J.

Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes

Sounds like this was a tenant that you inherited from the previous owner. Although the timing isn't ideal, I'd let her move and pick a new tenant that you personally screen and is better qualified. (Doesn't sound like this one is qualified if her sister had to help her with the rent.) I like to pick my own tenants anyway when I purchase a property.

Realistically, you can't force a tenant to stay. They'll leave whenever they want to. However, the last thing you'd want to do is try to force one to stay who is telling you she can't afford to pay the rent. Ultimately, you'll just end up with a non-paying tenant and an expensive eviction on your hands. Get them out while they're willing to leave voluntarily and do what you need to do to get a qualified, paying tenant in there. It's just part of the business.

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Leah Stuever
Realtor · Dallas, TX · Member since 2019 · 194 posts · 164 votes
6y
You have two choices: force her to stay in the lease. If she really cannot afford it, she will just stop paying and you will end up evicting.
Or you let her out and find a new tenant.
4 Reply
Brian Whalen
Member since 2019 · 1 post · 1 vote
6y
Follow the terms of the Lease to the letter, and hold them to the same standards. Remind your tenant that the Lease is a legal binding document. If it was you that wanted to break the lease, or do something prohibited, they would hold you accountable. It seems, and sometimes feels, cold and heartless, but this is your investment and you have a fiduciary responsibility to manage it properly. Hold them to the terms of the Lease.
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Kyle J.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
6y
Sounds like this was a tenant that you inherited from the previous owner. Although the timing isn't ideal, I'd let her move and pick a new tenant that you personally screen and is better qualified. (Doesn't sound like this one is qualified if her sister had to help her with the rent.) I like to pick my own tenants anyway when I purchase a property.
Realistically, you can't force a tenant to stay. They'll leave whenever they want to. However, the last thing you'd want to do is try to force one to stay who is telling you she can't afford to pay the rent. Ultimately, you'll just end up with a non-paying tenant and an expensive eviction on your hands. Get them out while they're willing to leave voluntarily and do what you need to do to get a qualified, paying tenant in there. It's just part of the business.
13 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
6y
Read the conditions of the lease. What are the penalties for breaking it? Tell her that is fine, she can be out Dec 1 but she's on the hook for rent until you find a new tenant. You will do your best and don't anticipate any problems. She can help by keeping the place clean and being open to showings (at mutually agreed upon times-try to cluster them together).
7 Reply
Tim DelaneyPro Member
Buffalo, NY · Member since 2018 · 790 posts · 530 votes
6y
I would let her go. If she is already saying she can't afford it, you are bound to run into problems in the future. If the lease allows it charge her a penalty.
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Chinda David
Investor · Lincoln, NE · Member since 2015 · 27 posts · 48 votes
6y
@Grant Doyle, very simple find out how much she can afford, find out her source of income and verified. Make the deal with that her rent is only 600 or 700 or whatever you fill comfortable with. You and her agreed and canceled the original lease and make a new lease with month to month only (you also tell her that you may carry this low rent until next spring and you want to get the unit back to do some renovations). I have done this many times by the way all of my rentals properties were purchased with inheritance tenants. I know everybody want to make profit when starting out. Most of start up business are happy if they can break even for the first two years. You want all tenants to keep paying you for your mortgage payment, your utilities bills while you live there. In the meantime get to know this house, learn to be a landlord. Good luck!
10 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
6y
Throw her out keep her deposit easy solution
2 Reply
Account Closed
Investor · United States · Member since 2018 · 565 posts · 356 votes
6y
Welcome to the world of business my friend. Lesson one: learn how to organize chaos.
3 Reply
Michael H.
Rental Property Investor · Houston, TX · Member since 2017 · 144 posts · 42 votes
6y
@Grant Doyle follow the lease to the letter is always Recommended, terms for breaking the lease should also be included. Also, maybe explain to her what an eviction does to her credit.
0 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Brian Whalen
Sounds good on paper. Not so good when they don’t pay rent or they simply leave.
3 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Grant Doyle
What does the lease and your state laws state? If this was in Iowa and she broke lease, landlord would need to attempt to mitigate their losses. You should do the same. You don’t “release” her from her lease, but you try to find a new tenant ASAP under the same conditions as her lease.
1 Reply
Daryl Luc
Member since 2019 · 226 posts · 107 votes
6y
Yeah, it sounds good to be the tuff guy and hold someone's feet to the fire until you discover how much that ultimately costs you! Let her go. The sooner the better. Keep the deposit, set a deadline to be out and immediately start looking for a replacement. From my seat at this table, the worst situation is she leaves in the middle of the night just before Christmas, you are now faced with the three worst months for renting and you have an empty unit that you have to heat with the fewest good rental prospects looking to move in the snow and cold.
2 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
@Anthony Wick exactly that is how it works in the real world! No point in fighting. Work out a lease break deal and find a new tenant. This isn’t the last time this will happen.
1 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
6y
Tell her she can leave but will forfeit the deposit. Get it rented as quick as possible in "as is" condition and continue saving for the renovation next year.
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3 Reply
Asia Taylor
Rental Property Investor · Columbus, OH · Member since 2015 · 34 posts · 22 votes
6y
@Grant Doyle I would let her out of the lease. You’ll likely regret not letting her out since you’re going to have to evict her and it could get ugly! Make sure she cleans the unit the best of her ability and try to rent it as is quickly. But at least now, you’ll be able to choose your own tenant by your own screening!
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Marian Smith
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
6y
@Grant Doyle Is $950 a reasonable rent for the unit in its current condition? Because yet another option is to lower the rent to what she can afford and go month to month, with her forfeiting, say, half her deposit for the optIon. ThIs would buy you time if you feel you are not ready for a turnover, especially during the holidays. Then give her 45 days notice or whatever you write into the lease addendum when you are eIther ready to find a new $950 tenant or to rehab. Just an option. Because I wonder if the seller took the tenant because she was overpaying and knew he would not be around for the inevitable blow up....who rents to someone getting monthly help from a sister to make rent? Just an option. Turnover usually costs a months rent and if the market won’t bear $950 month for the unit you are already out $75-$175 month anyway. It is your business and you do what is in your best interest (or like me, do what is easiest.)
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Chris R.
Rental Property Investor · Southern NH · Member since 2017 · 87 posts · 100 votes
6y
I can see your point about wanting to rehab the unit to your liking. I can also tell you that keeping a struggling tenant in place because her lease says so is asking for a basket of financial headaches. She’ll most likely be a chronic late or partial rent payer and you’ll spend more evicting her.
Let her break her lease on the condition she hangs in there until you find a replacement. Or, let her go, do some light cosmetic renovating, and get someone in who is fresh and well-qualified to pay the monthly bill. It even gives you the opportunity to raise rent a bit if you feel the market will bear it. Seems ideal to me.
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Alvin Henson
Towson, MD · Member since 2015 · 5 posts · 2 votes
6y
Forcing her to stay seems like it will be more trouble than it's worth. I agree with the suggestion of working out a mutually agreeable solution where she can stay at a more affordable rent. That way you get something while also helping her in the process. I understand this is a business and you're in it to make money, but compassion/empathy will always be paid forward. It just makes sense to get something rather than let her go and potentially get nothing until you can rent it again. If you inherited this tenant, I'm sure you didn't receive the deposit, so that option probably doesn't exist.
On the other hand, I'd like to screen and choose my own tenants to avoid this situation. So letting her go and doing that might work out better.

Tough choice, but you have to do what makes the most sense according to your business goals. Good luck!
1 Reply
Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
6y
@Grant Doyle You have a tenant who is telling you that she cannot afford her rent. So you can either deal with a vacancy/turnaround before you are 100% ready or you can deal with a long drawn out eviction. From experience I would rather deal with a vacant unit than a problem tenant.
Be lucky she is being proactive about trying to leave when she can't afford the rent. Most just stay in the unit until the courts tell them to leave.
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
You said this was the largest unit with the highest rent. Have you considered trading spaces with her? ie, you move in the larger unit and renovate it while living there. She's moves into the smaller unit with less rent which she may be able to afford. (She's going to be renting somewhere....) It would be worth looking into at least.
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Luke Saglimbeni
Rental Property Investor · East Longmeadow, MA · Member since 2019 · 154 posts · 64 votes
6y
@Grant Doyle
Let her leave: long run least amount of headaches. If you force her to stay she may end up not paying. Can you move into her unit? IMHO it’s a blessing to start fresh. So YOU can screen the tenants and YOU can set the quality of people in your properties. Run it like a business and set the quality bar high. Other tenants will take note.... good luck
0 Reply
Douglas J Andrews
Member since 2018 · 6 posts · 0 votes
6y
@Grant Doyle
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Melinda Miller
Rental Property Investor · St. Louis · Member since 2018 · 43 posts · 24 votes
6y
Tell her bye. And keep the deposit.
0 Reply
Daryl Luc
Member since 2019 · 226 posts · 107 votes
6y
FYI for your future consideration, don't ever permit a 'ghost' to help pay the rent with your knowledge. Anyone, sister, father, ex etc. who is supporting a tenant's cash flow should be on the lease as a co-signor and identified in that way.... and do your due diligence with at min. a credit check on the co-signor.
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Michael King
Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
6y
I let a tenant do this once. He'd lost his job and had to move 3 hours away. He was out on the day we agreed upon, and he happily paid another month's rent. Forcing them to stay could make them a bad tenant. An empty house is better than a bad tenant I think.
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