Raleigh, NC · Member since 2021 · 8 posts · 3 votes
I’m in the process of purchasing a rental property in which the current owner (who is also currently occupying the property) will lease month-to-month as she searches for her new home. The rental rate is high enough to justify having a month-to-month lease and motivate her to move out.
Hoping that the BiggerPockets community could share any tips that may be of value for a situation like this. Repair negotiations, certain details to add to the lease, pet addendums to the lease, etc.
@Daniel Giacomazzi The seller will become your tenant? Say yes. Money may be tight and you could avoid a vacancy for a few months. You will get your hands on the apartment later.
For me, we would sign a regular lease with a MTM term. Slightly below market rent (you are still negotiating the purchase? be nice). Tenant should pay for all repairs during the tenancy (agreement to this clause may indicate if it drains and plumbing were kept in good repair.) Is this person a hoarder or might they leave a vacant apartment in need of a pricey make-ready? Consider the condition of the unit when setting the rent and purchase price - a great negotiation item.
Pet? Do they currently have one? If yes, consider that when setting rent rate. No pet deposit but a clause to acknowledge any new damage caused by pet would be paid for by Tenant, like any other leasee, must clean up common areas of pet fur and usual pet clauses. If no, mention that any future pets would need your approval and a pet agreement would be signed later.