Best Practices for Inheriting a Tenant
As a real estate investor, inheriting tenants can present both opportunities and challenges. On one hand, having existing tenants means immediate rental income, potentially saving time and effort in finding new occupants. However, it also comes with the responsibility of managing pre-existing relationships, lease agreements, and potential issues that may arise from the previous landlord-tenant dynamics. Successfully navigating this scenario requires a delicate balance and we’re here to break down the best practices of inheriting a tenant. Let’s take a look!
Review Existing Lease Agreements
These are a few items you need to speak with inherited tenants about before closing so everyone is on the same page. Thoroughly review the terms of the existing lease agreements to understand the rights and obligations of both the landlord and the tenant. Pay attention to clauses related to rent amount, lease duration, maintenance responsibilities, and any special provisions. You’ll want to confirm the following with tenants:
#1 Lease Length
#2 Rent Amount
#3 Contact Info
#4 Maintenance Requests
#5 Deposit Amount
#6 Pets and Fees
That’s why it’s so important to make sure you have the right property management software to streamline processes for you and your tenants. Baselane lets tenants pay rent on any device with a bank transfer or card, and helps you get paid on time. Plus if you click here, you can enter to win a $500 Amazon gift card!
You’ll also want to make sure you have landlord insurance and your tenant has renter’s insurance. You can easily grab a free quote for landlord insurance using Steadily, and send your tenant to Lemonade to get renter’s insurance!
Communicate with the Tenant
Open communication is key to a successful transition. Contact the tenant as soon as possible after acquiring the property to introduce yourself as the new landlord and provide them with your contact information. Be transparent about the change in ownership and reassure the tenant that their lease agreement remains valid.
Here’s a sample ownership exchange letter. Feel free to use it!
This letter is to inform you of an ownership change at your current residence. On July 1st, the property will change hands and be owned by Happy Homes LLC. I will be your new property manager and contact maintenance request, lease renewals, questions, etc.
The letter I received from the previous owner indicate your current monthly rent payment is $1000. Starting July 1st, your rent can be made through Baselane.
Additional instructions on setting up this payment will be provided at a later date.
We have your current phone number in file as 555-555-5555 and email your email as john@example.com. If this is incorrect please let me know ASAP.
Do not hesitate to contact me if you have any questions. My preferred method of communication is email but I will provide my phone number for emergency request only.
Thank you.
By following these best practices, you can effectively inherit a tenant and establish a positive and productive landlord-tenant relationship! Make sure to review existing lease terms and proactively communicate with your inherited tenant. Plus, getting set up with the right property management software can make inheriting a tenant a breeze. Check out some tools below!
RESOURCES:
Try Baselane to keep track of your rental property finances and enter to win a $500 raffle
Send your new tenant to Lemonade for renter’s insurance
Grab a free quote for Landlord Insurance with Steadily
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