When real estate investors purchase a rental property, it often comes with current tenants already in place. These are known as inherited tenants.
Sometimes the transition is smooth and the new landlord inherits organized files on the current tenants. However, there are time when new landlords get little to no information on the inherited tenants.
This video explains more about what new real estate investors and landlords can do with new property as well as new tenants in place:
Gather Information on the Inherited Tenants
If there is no information passed along on the current tenants in a newly purchased property, the landlord need to start gathering some. The first place to look is on the purchase contract for the rental property. This and similar purchasing documents should list the tenant’s name, the current rent and some other basic information.
To get more detailed information, the landlord will most likely have to visit the tenants at the rental unit. They can deliver a change of management notice to the tenant. This document informs the inherited tenant about new contact info, where to pay the rent and how to report maintenance issues.
Many landlords make a personal visit to meet the tenant. They take the opportunity to get more detailed paperwork filled in. Follow up questions about total occupants, pets and more can help landlords compare the current household to what is on the lease agreement.
Tips on Handling Inherited Tenants
Many landlords don’t bother with screening inherited tenants. Therefore, they often take the approach of dealing with bad tenants when the lease is up for renewal. If the tenants are doing well, then everyone is happy with the arrangement.
In extreme cases, some tenants push back against new rules and behave badly. As a result, landlords may have to start the eviction process for any tenants that don’t want to conform to the new owner’s updated requirements.
Ultimately, the goal of every landlord is to fill every unit with excellent tenants. Of course, the risk of inherited tenants is that the landlord didn’t choose them. On the other hand, they could inherit some excellent tenants that want to stay for a long time. Only time and communication can reveal which type the inherited tenants will be.