New lease for existing tenants

[Anthony McKeen]

Hi all!

We are closing on our first duplex in Ohio 1 week from today. YIKES!!!! I have some questions regarding the existing tenant lease situation and any help from experienced investors would be greatly appreciated!

The existing tenants in each unit are long term at 5 years and 13 years in the property. I'd prefer to continue with some stability and not scare them away. They have been month to month with the previous owner, without a written lease, each paying $700/month in rent. I had them sign an estoppel agreement, stating the above rent payments. We plan to have new leases drawn up and signed by the tenants, sooner rather than later, and this is the crux of most of my questions.

A.) Because they are month to month and have no existing lease, I can have them sign a new lease at any point, correct?

B.) What have you had more success with -- keeping existing rents until the end of the year and then increasing? Increasing right off the bat? Continue same rent for 1 year and then increasing?

C.) Additionally, they do not have renters insurance. Have you had existing renters decide to leave based on being asked to obtain renters insurance? Do you feel it is a necessity that all renters obtain renters insurance?

D.) There apparently was no security deposit in place, per the estoppel agreement signed by the existing tenants and the previous owner. When purchasing a property with existing tenants without any past security deposit, do you typically ask for one with their next months rent?

E.) The previous owner also did not have any fee for pets, and both of the tenants have dogs. I am fine with this, but do plan to have a pet fee.

Essentially, I am trying to figure out the best strategy and timeline to A.) Have tenants sign new leases B.) Increase rent C.) Have renters obtain insurance D.) obtain security deposits and E.) pay pet fees. Obviously there are several things here that could potentially scare away a long term tenant and I'd like to go in with the best strategy. Again, any and all advice/experience would be greatly appreciated and thanks in advance!

Edit signature

[Michael Magno]

@Anthony McKeen

State of Ohio required a 30 day notice to be given when a lease is to not be renewed. When a lease is expired and a landlord continues to collect rent under the previous lease terms, in the eyes of the law, and court you’ve entered into a month to month lease. Good luck with your closing. I’m surprised your agent didn’t get you all of this.