Removing Long Term Older Inherited Tenants

[Tyler Tacy]

Hey guys, I'm 23 and closing in on officially purchasing my first rental property, just finished inspections this week. The property is a 4plex in a great part of my town. Two of the units are currently rented to LONG term tenants 9 and 30 years! They're also paying well below market rent $550 vs $900. I had the opportunity of meeting them while I was following along with inspections and talked a bit.

The 2 tenants are both older women around 65 years old and really nice. Both their husbands passed away in the past few years, I saw O2 tanks and walkers in the units, and overall just a sad situation that makes you feel grateful. I don't know their financial situation but my guess is they can just get by paying the $550 rent. The one women couldn't have been nicer and even told me she hopes I buy the building and become her landlord because I seemed nice and responsible. 

My end goal is to remove them so I can rehab their units and get them up to market rent. I know if anyone else buys this building they would just serve them a 30-day notice and move on. I couldn't do that to them right off the bat and would feel horrible doing so. I'm willing to work with them and in my head give them up to a year to move out and even offer to move all their stuff for them. I do understand that this is a business and I'm not getting into it to house people for free but at the end of the day their still people and just want to handle it the best possible way for everyone

I know I just have to have an uncomfortable talk with them but just wanted to see how you guys would handle this. 

Thanks in advance!

[Nathan Gesner]

Tyer, you can ignore people like Eric. I wonder if he yells at grocery stores for raising the price of eggs and bacon over the last 30 years instead of keeping things affordable for little old ladies? Or maybe he would like to insult the local car dealer for charging $17,000 for a used sedan when this little lady paid $6,000 for her last one in 1989. Seriously.

You're buying a property that is under-performing. That's part of making a wise investment. Treat it like a business, but don't be an a-hole about it and kick them on the streets with just 30 days notice. Notify both tenants as early as possible. Explain that you are an investor but the investment only works if you rent at market rate. Give them 90 days to find alternative living arrangements and then stick to it, period. That should be sufficient for them to find income-based housing, a family member, or whatever. If they are half-way intelligent, they will look for alternative housing and see that rates have gone up since 1996 and they've been getting off easy for a long, long time.

I personally prefer to keep the notice short, professional, and without justification, excuse, apology, etc. You're running a business and they can either afford your product or not.