When rent is less than half of market value.....

[Jamie Blair]

Hi all, new investor here. In my area (Eastern Ontario, Canada), there are quite a few duplexes or multi-family properties that are coming up for sale that have incredibly low rents. One I was just looking at was a duplex where the rents were $600 for the 1-bedroom unit and $650 for the 2-bedroom unit. The units aren't in too bad shape, a bit dated, but could definitely be renting for far more. From what I've read, it seems like there's nothing that could be done about that. If I were to purchase this property, I would assume the tenants at this rent and could only increase rent if and when they move out. And even if we wanted to completely renovate the entire unit, it's my understanding that I need to offer the unit back to the tenants as the same price they were paying previously before I could search for new tenants. I guess I'm asking if these buildings are just lost causes?? 

[Roy Cleeves]

Hi Jamie

The key is to get the current tenants out so that you can reset the rent.

You can always ask the Sellers about the possibility of "cash for keys".  Will the tenants take $5,000 and move out?  Or whatever amount you are willing to pay.  It may seem like a lot yet it can be considered part of your purchase price to get it empty.  

You can have the Seller do that as part of the deal.  Tenants must volutarily move out - signing an N11.

This is easier said than done.  Yet worth a try.  Good luck!