Inherited Tenant Friends of Seller

[Katie Ritter]

We are set to close on our first investment property in mid-April.  The unit it is a duplex with one of the units rented by a tenant for about 6 years. We were under the impression that the tenant was paying $650 per month.  When we finally got the estoppel agreement signed, he is paying $600 per month and no security deposit.  The tenant is close friends with the sellers and the tenant is currently on a month to month agreement.  Should we push the issue of the extra $50 per month before we close or do we create a new contract with the increase of $50 per month or should we not push the issue since it would be tough to get a new tenant in during this pandemic?  

[Ron Todd]

If the tenant is paying on time and they haven't had any issues with them, I would keep them until we know more about the extent of covid's impact. It's month to month so the power is in your hands to raise rent later on. If you try and raise rent and the tenant leaves, it would take a full year to recoup a 1 month vacancy ( 12months * extra $50 = $600). I'd wait until the market has stabalized and then raise rent.