Home Buying in East Boston>Question Details

Thomas Crane…, Home Buyer in East Boston, Boston,...

I want to buy a house which is selled with tenants, and rent really under market, should I buy it?

Asked by Thomas Crane Public Library, East Boston, Boston, MA Tue Mar 29, 2011

How hard I can have rent incease to market rent? If they refuse to pay the market rent, how easy I can ask they move out?

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Answers

5
I would first recommend contacting an attorney that specializes in real estate and rentals. This being said if you purchase the home you must honor the exsisting lease that the renters have until said lease expires.
1 vote Thank Flag Link Sat Apr 16, 2011
It all depends on the laws it that area.
most areas you can ask the tenant to move out after the lease is done.
or negotiate the rent again... saying that, some areas are protected with rent control laws, and you can not do that.
so check with a local lawyer.
orlando invester amgrents.com
0 votes Thank Flag Link Wed Jan 16, 2013
It's definitely best to consult an attorney on this one, since they'll give you the most complete and relevant advice, but something important to take into account that hasn't been mentioned is the length of the leases. Are they month-to-month, year long but with only a few months left, or do they have a substantial amount of time left? If the price is right on the property it may be worth waiting for the leases to end and then raising the rents once they do -- you're under no obligation to honor the previous lease's terms and price once it expires, and if they happen to be month-to-month leases then you'll be able to raise the rents in as soon as thirty days.

I you find my advice helpful. If you need any other assistance don't hesitate to contact me!
0 votes Thank Flag Link Sat Apr 16, 2011
Before considering such a purchase, consult with an attorney who specializes in real estate and inform yourself well regarding your State's tenant laws--then go from there....
0 votes Thank Flag Link Tue Mar 29, 2011
Be very careful.

I'm not a lawyer, so this isn't legal advice. For that, you need a lawyer. However . . .

If you buy a property with tenants in place, you must observe the existing lease.

So: How hard can you have rent increase to market rent? Not at all under the terms of their existing lease.

If they refuse to pay the market rent, how easily can you get them to move out? Not easy at all. They'll point to the valid lease.

You have three options:
(1) Buy and wait until the lease expires. If there's only a month or two left, that probably won't be a problem.
(2) Ask the current owner to either remove the tenants or raise the rent as one of the conditions of your purchase. Now, he can't just break the existing lease, either. But it's better to put the burden on him. He's got more incentive to do so.
(3) Buy the tenants out of the lease. See if they'll accept a few thousand dollars to voluntarily terminate early.

If the tenants are in violation of the lease, you certainly would have the right to evict them. However, that too is better done by the current owner than you.

If the seller won't deliver the property vacant and there's a lot of time left on the lease, reduce your purchase price to account for that difference. Let's say they're renting for $300 under market rent and they've got 7 months left on the lease. Reduce your purchase price by $2,100.

Check with your Realtor for more strategies.

Hope that helps.
0 votes Thank Flag Link Tue Mar 29, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
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