Under market rent tenants

[Anastasia Rodriguez]

Hello everyone! So I’m officially under contract for my first multi unit house hack, but I’m having a bit of hesitation about the 2nd unit. The tenants are wayyy under market rent but have been there over 10 years so they must be somewhat reliable on payment, unfortunately this means I’ll have to cover a larger portion of the mortgage than makes financial sense. I know the unit will rent for more, but the holiday season is coming up and I would love to have some money to cover the mortgage than just having a vacant unit throughout the winter until more renters are looking to move. Has anyone had experience on finding tenants throughout the holiday season or any advice on how to handle the situation?

[John Warren]

@Anastasia Rodriguez I would not personally try to kick them out right away, but you need to know the proper notice times. In Chicago proper, you likely are giving a 120 day notice. In Cook County, you could do a 60 day notice. There are still a few suburbs around that have separate laws where you can get away with a 30 day notice. If you are doing a 120 day notice, any day in October you give notice means they get November, December, January and February. So in essence, you would still want to give notice pretty soon. 

Is this a unit you are planning to live in? Maybe go at this from that angle.

One last thought. Can the tenant pay a higher rent? A lot of times, there are good folks who are happy to pay closer to market to stay put. I have inherited many wonderful tenants who have been with me for years. I would feel them out to see what they can do.