Education and news for smart DIY landlords!
Just bought your first rental property? Congratulations! If the property comes with existing tenants, the good news is that you save time in finding new ones. It means instant cash flow. As you’ve already guessed, existing tenants in a rental are called “inherited tenants.”
Some landlords feel apprehensive about inherited tenants because and we can’t blame them. If you’re in this situation, let me tell you that it’s normal to expect challenges. After all, you weren’t the one who screened these tenants and have no idea about the details in the lease.
What do you do? Here are some helpful tips.
Before or after purchasing the rental, you’ll want to learn important details such as the following:
These pieces of information will give you an idea of the kind of tenants to expect and whether everything stated in the lease meets your expectations.
In cases when you need more details on the tenants, the next thing to do is pay the tenants a visit. Before you do that, it will help to send each tenant a notice regarding the change of management. When you meet in person, present yourself as the new property owner.
If you plan on having a new lease, inform the inherited tenants ahead of time. The benefit of issuing a new lease is that you can obtain their most recent information. In fact, some landlords re-do the tenant screening process to get a good idea of the tenant’s backgrounds. If you believe that this helps you as the new property owner and landlord, you have the right to do it.
An estoppel certificate, also known as an estoppel letter, allows you to gather a tenant’s understanding of the current lease. For example, whether the tenant paid the security deposit or whether amendments to the lease have been made in writing or orally.
Related: What To Do When You Inherit Tenants
Every tenant reacts differently to a new landlord. Some tenants act rudely or feel intimidated by your presence because they’re scared that you might terminate the lease or charge more rent. On the other hand, there are tenants that are nice and courteous.
Treat inherited tenants with care. Be the good landlord you should be - establish open lines of communication, adopt more convenient payment systems (online payments), give reasonable advance notice before you enter the unit, and respect your tenants.
However, keep in mind that if tenants don’t obey your rules, you may have to start the eviction process.
For a periodic rental agreement (month to month), you’ll be able to increase the rent but give an advance written notice. The document should contain how much the rental increase is and when it will take effect.
The only thing left to do now is to establish new rules and have new systems in place. Do what you believe is best to run your rental business successfully. Lastly, seek out proper education from good resources, online and offline.
Finally, I offer you the opportunity to take a complete DIY landlording course: Landlord Prep: Video E-Course and How-To Tutorials. Everything you need to know to become not just a landlord, but a successful landlord, is here!