HELP - Inherited Tenants

[Kelli Standekar]

Hey BP!

I will be closing on my first rental property (duplex, 2bed - 1 bath each) within the next month and need help deciding what to do with the tenants that currently live there. The current owner does not have a lease (he said he lost it), however I made the tenants fill out an estapol agreement so I have basic information about their rent amount, utilities...etc. The tenants are on a month-month lease and have been living there for around 8 years each. Current rents are below market one tenant pays $425/month the other $450/month. One person has a dog (Spaniel) and I believe he smokes as well. I don't like either of those things in my unit so I am considering the following options:

Option #1

Ask both tenants to leave 30-days after I take possession of the property , renovate the units on the outside & inside (gutters, siding, interior paint, floors, mini-split units, ceiling, other miscellaneous things) then raise the rents to around $700/month each and look for good tenants (no smokers, no pets, good jobs) to put on a 1-year lease.

Concerns: I question whether or not this is the right thing to do since the virus has many peoples struggling with their jobs and I don't know if its right to ask the tenants to leave during this "crisis" (they have lived there for 8 years and have been paying rent). I also worry that finding new tenants during this time might be hard.

Option #2

Serve tenants notice that I will be increasing the current rents since its below market to $500/month each plus $25/month pet fee) and let them decide whether to stay or leave. I will only renovate the outside (new gutters and siding) but leave the inside as is since the tenants have lived there for around 8 years.

Concerns: I did not personally vet the current tenants and I worry the dog and smoking might damage the units (so far, the units look fine on the inside). On the other hand, they have been there for 8 years and paying rent so that is a plus.

Hope anyone can provide some insight on what to do for someone in my situation and I greatly appreciate your help and ideas!

Thank You BP!

Kelli