Removing existing tenants after buying a property

[Ethan Yuan]

Hi all,

I’ve noticed it is common practice for investors to buy a property, get rid of the existing tenants, renovate the property, and increase the rent. My question: what is the process of removing tenants and how long does the overall process take?
If you bought the property in the middle of a Tenant’s year/multi-year long lease, do you have to honor it until the lease is up? I’m assuming the tenant will have to sign a new lease with you, would you make the length the lease the same as the remainder of they’re previous lease? Do you have to wait to do the renovation after they’re lease is up and move out?

Thanks

[Patricia Steiner]

If you buy a property with existing tenants, plan on honoring the remaining lease term.

During your due diligence - before closing on the property - is when you should decide whether the tenants are "keepers" or not.  Reviewing leases and payment records, inspection reports - all that is critical. If you don't like what you see, add an Addendum to your Sales Contract that the property needs to be delivered to the buyer "vacant" at closing.  Let the seller undo/settle leases.

I've had a great experience with existing tenants - but I knew what I had before I got them.  The best thing you with all tenants is enforce your lease.  When you do so, the standard is set and you'll avoid the "let's see how long it takes the new guy to figure things out" game.