Respectfully terminating a Tenant at will

[Clifford Sargento]

Hi All!

Just entering the rental business property and my parents are allowing me to use their properties to grow.

They have a property that they have been renting to tenants with no contract for close to 10 years. These folks take care of the property and are good people. However, my parents have graciously allowed them to pay under current market rent value which may be around $2000 a month upon my research. My questions are:

- is it right/ should I ask them to vacate so I can get new renters to pay the market value

- if the answer is yes to the above how do I respectfully and legally ask tenants to vacate? I would give them plenty of time to find another housing situation. My expectation would for them to vacate in May of 2023 (today October 2022). 

Thanks guys! 

[Kevin Sobilo]

@Clifford Sargento, how far under market rent are they paying currently? Can they afford a rent increase rather than making them move? You can always sign them to a lease at a higher rent rate.

Another thing to consider is what "market rent" is. I think its very misunderstood. It isn't the MOST you see similar properties advertised for or rented for.

In many cases if you see the top prices for similar properties at $2k, they may take longer to find a qualified renter and then that rented is less likely to stay more than the initial lease term.

For example it takes 3 months to find a tenant to pay $2k and then the tenant leaves after 12 months causing another 3 month vacancy, then over a 2 year period you will have only collected 18 months of rent or $36k. You'd be MUCH better off renting at $1800 where it might only take 1 month to fill the vacancy and the tenant stays 2+ years collecting $41,400!

Sometimes LESS is actually MORE! Something to think about when evaluating what "market rent" actually is for you.