Inheriting a long term tenant!

[Brad Parker]

Hi everyone,

I am currently planned to close on a rental property in southern Indiana and will inherit a long term tenant. This tenant has lived in the home for 10 years, and pays a VERY low amount in their monthly rent. 

I have a few specific questions and would greatly appreciate any advice or insights you can offer:

Tenant Communication: What's the best way to introduce myself to the current tenants and inform them about the change in property ownership? Are there any common pitfalls I should avoid during this process?

Understanding the Lease Agreements: There is no lease agreement currently in place, and the tenant is paying about $400 lower then current market rent. We have three offers for them, and I would like to present this information in the best way possible. How should I go about this? Is an email with all this information the best way to start? 

State-Specific Laws: What are some crucial state laws regarding tenants' rights and landlord responsibilities that I should be aware of? Are there any good resources or websites where I can learn more about these laws.

I'm eager to ensure a smooth transition for the tenants and to manage this property responsibly. Any tips, personal experiences, or resources you can share would be incredibly helpful.

Thank you in advance for your assistance!

Best regards, Bradley Parker 

[Gregory Schwartz]

Great question, I recommend a basic letter explaining that you're the new landlord. This should include how and where they pay rent, how to get in touch with you for maintenance items and any other important information. I would also mention that you would like to discuss the terms of a signed lease. Lastly, we like to include a $10-15 gift card to Starbucks or Chick-fil-a.

I would verbally discuss the options you plan on presenting, following that up with an email outlining the details of the options. Then following that up what a call if required to answer any questions. The phone call lets you get a feel for their situation and how to best come up with a win-win. 

In a recent example, we increased rent on an inherited tenant from $1200 to $1500. It was clear that the tenants couldn't afford the increase and really wanted a place with a garage for his motorcycle. So we helped him find a place with a garage. The only way we learned this was from actually talking to him. If we just sent a notice with increased rent he might have been upset with us, which usually results in a more expense turn for us after he moves out. 

Good luck