When taking over management of a property, it is common that it will come with tenants in place. Now these tenants suddenly become your tenants. This can be mutually beneficial to both parties. For the manager, you don't have to immediately spend time marketing the property and attracting new tenants. There is also immediate income available. For the tenants, they may have been neglected by previous management and are looking forward to a fresh start with a new manager or landlord to get their problems addressed.
However, it can also be risky. The new manager does not have complete knowledge of the situation. How well were these tenants screened, and do we have the full story on the state of the tenancy? They may not have been educated on the rules and the way we prefer to do business. There are usually some strings attached, so make sure to ask all the pertinent questions and visit the property to do your homework.
In all honesty, you never really know for sure until you begin working with them. A clean slate and a fresh start can benefit anyone. Make sure you take the time to speak with them and give them a chance to tell their side of the story. Ask them about the terms of their lease to ensure they understand the rules and have been provided clear guidance on how things will proceed.
Once the initial homework and introductions have been completed, make sure to:
- Get a copy of the lease ASAP
- Understand the lease you are inheriting. Leases go with the property regardless of owner/manager.
- Review the financials to make sure you have a proper accounting of payments and security deposits
- Consider having the tenants fill out an estoppel agreement. This will give you a good idea of their understanding the lease, rent and security deposit for any future disputes.
Lastly, put yourself in their shoes. They are probably concerned about the unknown and how this could effect their home. There are probably going to be a lot of questions, and if you don't address them frustrations will arise. This can lead to a confrontational relationship from the start. Send a letter, introduce yourself and inform them how things will operate going forward. This will let them know that you are not an absentee manager and you take pride in your work.