Inherited tenants in new 4-plex

[Marc S Gilker]

Inherited a tenant that was a relative of previous owner. They have no damage deposit or lease. I plan to raise rent as its well below market. With no lease, I am worried about squatters rights. The building is a 4 plex and cash-flows. What's the best way to approach this conversation. 

[Patricia Steiner]

Time to "landlord up..."  Send the tenant a 30-day notice that the month-to-month tenancy is being terminated but you welcome him/her to remain with you under a 12-month lease. Advise that the new rent will be $x effective on day 31.  Ask that he/she contact you within the next 3 days so you can go over details and address any concerns.  If they elect not to remain a tenant, they will need to vacate on day day 30 and it will be leased to a new tenant starting on day 31st. (I like to mention this because it takes away the idea that no one will be moving in for a while...so maybe hang on a tad).

Be matter-of-fact because it really is just a fact of business that leases are engaged and rent established.  You won't know what you have until you give notice. I would not have closed with a non-lease tenant in place but if I did for some reason, my goal would be to get them under a lease, under market rent - or start the parting of ways.  

Congrats on your acquisition.  Hope this helps.