I am about to complete the deal for my first investment property. The property is currently renting under market value, and I am wondering what will be my next course of action as soon as I acquire the property.
Do I have the right as a buyer to declare their leases null and void? Or am I obligated as buyer to uphold the current leases on the property? Should I increase the rents if I have the right to do so. In the case of structuring a new lease for my tenants, what is important for me to add to a standardized lease in order to protect me more as a landlord from obnoxious tenants which the property seems to have.
In fact, I do not know where to start. I need advice from you all.
I belive this is a State by State issue! I know here in Colorado I have to give 30 day written notice as to change in rent! I am going to move this to the landlord forum to give you better answers! Thanks Robb!
Thank you Reo
You moved this right in the middle of me posting to it…now I gotta re-type it. If you even knew how bad my typing is, you wouldn’t even think about laughing!
:guns: ROBB’S HEAD
Sorry for the imconvenience my brother. Five strokes of cane for you Reo:)
In most cases, you must honor an in-place lease…Check the lease and make sure that it has not automatically lapsed into a month-to-month.
I bought a property not too long ago that “came with Tenants” also under market rates. As soon as I got it, I resolved their tenant issues that the previous landlady had been promising them to take care of for months, painted the outside (mostly to protect the structure but it also looks a whole lot better), bought a new lawnmower for the property, put in a fire extinguisher and smoke detectors (I cannot fathom putting yourself in the position of not having smoke detectors if you’re a landlord!), etc. Then, I raise the rent (giving the 30+ days like Robb indicated) by $25 and will do another $25 raise in January. These raises represent about a 4% raise in the rent. People will not leave because of a small raise.
I recommend that you do similarly…make some quick, noticeable improvements and follow that with some well-spaced “nuisance raises” ($15 - 50 a month). If you want to get rid of them, notify them that rent is going all the way to market level.
As for clauses that you need to add, it depends on how bad they are and what they’re doing…
BTW: REO = Robb!
R.E.O.=Stu Padasole<—That is what my wife calls me
Are you sure that’s a correct spelling???
I think so I will ask her!
My ex-wife calls me the same thing but spells it differently…
I would strongly recommend getting some education on landlording issues. It is obvious from your post that you haven’t yet gained much of this knowledge and you WILL pay a heavy price if you don’t acquire this information quickly. I’d suggest attending your local REIA meetings starting ASAP and also reading some books on landlording. You will need to know how to screen tenants, the law in your state, strategies for dealing with tenants, forms to use, etc. There are also many techniques for dealing with rental applicants that will save you a lot of time and money.