Real Estate

You bought a renter-occupied property but don’t know anything about the property management

Uh oh. But it is not uncommon.

Let me start by saying that managing your own properties is the way to go.

Why?

Because you must know the laws and what you can and cannot do as a homeowner. You may not be interested in managing the properties yourself and plan to hire a management company immediately. * Warning *: If you don’t understand property management, you won’t know how to hire a property management company or if they are doing a good job. I’m pretty sure when I say that most property management companies aren’t good at it.

Now, to the problem at hand: There is a tenant on your property!

1. When you bought the property, you should have received deposits and tenant contracts from the previous owner. If it didn’t, it started badly. If the landlord says they had no contracts or deposits with the tenant, but the tenant says they had a contract with the previous landlord, ask the tenant for copies of the contract they have. If they are also unable to submit a contract, there is nothing to force you to abide by the above terms.

2. Hopefully, you have received the tenant’s deposits because when you move in, you want something to cover the repairs that you will need to make, and you will also be responsible for refunding any deposits that have been paid that are not used for the unpaid rent or the damage. (even if it was paid to the previous owner who did not pass it on to you).

3. You are legally bound to abide by any previous contracts and the terms that the tenants have (again, as long as you have a copy of these agreements). Consumer protection laws protect the tenant and bind him to his previous agreements until those agreements expire.

4. If there is no lease, send all tenants their own new leases immediately. They are allowed to sign or move. Then you will manage your property according to your terms.

5. Owning a property and managing tenants are two very different businesses. You must learn to manage the property if you are going to have tenants. I wrote a book The Essential Owner’s Manual – available on Amazon, which is a great starting point.

You own the property, you are the one in charge. You need good contracts and it is essential that you know the local laws and how to manage tenants.

6. When you decide to hire a property management company (PM), know that it manages itself based on your paperwork and rules. I was a PM business owner for years and most of the owners came up with their own pre-signed contracts and rules. Some allowed pets, some did not; some allowed smoking, some did not, etc., etc. We enforced the rules of the owners. What you do with your property is up to you: the PM company enforces its rules (if the company is good …).

Property and / or tenant management goes back to contracts. And your local laws. Every state is different. Know your laws.

Also, owning rental properties is a business. When a tenant is “bad”, even behind on payments, start eviction IMMEDIATELY. I listen compassionately to your reasons, but the rules are the rules and don’t bend them for none because if you give in to one, you have to give in to all (consumer protection laws, again).

Have you ever purchased a property with a tenant already installed?

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