Inherited Tenants running a business in property...

[John Ringgold]

In a few weeks we will be closing on a duplex where both sides are rented by one individual with a month to month lease.  The young lady is a nurse and is using the other side to "sub-lease" to an elderly person where she can provide care for them by being right next door.

We are working on our new lease as this will be our first rental investment purchase.  The current landlord was okay with this arrangement, but we aren't sure this is a good idea.  Subleasing and running businesses don't seem to be suggested practices with leases.  

Would you allow this arrangement?  What are your thoughts and concerns?  

[Pat L.]

We had a similar situation. Tenants have been there 6 years, the husband is a contractor & always had an office in the home. When Covid hit the wife lost her JOB at the local school as a class room aide. She is NOW a psychic medium & apparently quite successful. The big old 1830's home is apparently haunted so I guess it was a natural fit

We re-wrote the MTM as a Commercial NNN, raised the rent significantly, insisted on them holding commercial liability coverage. We required proof of insurance in the form of a certificate of insurance, naming us as the certificate holder & they complied. The town gave them approval for the in-house business.

Good tenants, they always direct deposit on-time & take very good care of the place. However, with prices through the roof we intend to sell it this year, giving them 1st refusal with the possibility of us holding the note.