Posted by Millie I. on March 24, 1999 at 17:24:47:
If the tenant has a written lease, usually they have their ‘Tenant Rights’ to stay till the end of the lease. You cannot demand that the seller violates tenant’s rights, unless the tenant volunteers to leave.
However, everything can be resolved in a friendly win-win situation.
Upon taking title of the property, I would interview the tenant to find out what their strengths and weeknesses are. ( You never know, the tenant could be ready to buy a smaller house in case you have one for sale). I would be honest and tell the tenant that I bought the house to rehab and make a ‘Living’ on the sale. Let the tenant tell you if he would move willingly or not, (remember you can’t make him). If an incentive is needed, offer to refund the last month’s rent if he moves by a certain date, and give him his deposit back also. With 2 months rents coming back to him, he can find another place anywhere, there is a better chance for him to agree. You need to convert the ‘Inconvenience’ you caused him into an ‘Opportunity’ for him to move to some place better.
Now he gave up his lease and gain one month’s rent back. You invest one month’s rent to free the unit for bigger and faster gains. You both win. Look at the big picture.
I extended an offer on a property where the seller agreed to my price but says he can’t deliver the property vacant. The margin is 62%. The potential profit after resale is $85,000, give or take, to be split 50/50 between me and my investor. The property needs to be vacant for me to do the rehab necessary (cosmetic). Also, the rents are WAY below market; $550 now compared to $1,250 market. I need the property delivered vacant but the tenants have leases with the longest expiring 3/'00. What are my options?
Posted by M. R. Eddy on March 25, 1999 at 08:13:58:
I like the idea of just offering one month’s rent credit first. But if that does not work, here are some other ideas.
With the problem tenant that won’t move,
Idea 1: offer to pay their moving expenses (provide truck, pizza and pop for a day)
Idea 2: offer them credits towards the purchase of one of YOUR other houses. Possibly $1,000 or $2,000, but that it must be used in X amount of time, maybe 12 months.
The bottom line is make it as pleasant and desirable for the tenant to WANT to move because it is good for them. Don’t make them upset or they will put their brakes on and not move and possibly even damage the property. Make it good for them, because they already know that they are making it good for you.