Investors who own and operate income property, whether it’s single family homes or small to mid-market multi-family buildings, tend to fall into two categories when it comes to feeling a sense of obligation to their tenants, they either do or they don’t. There’s usually not too much gray area with this one. Neither is right or wrong. Real estate is a business but it’s a people business and relationships with tenants can get in the way of monetary business decisions.
When you decide to sell an investment property, the potential for tenants to be impacted negatively is high. From allowing access to the property for potential buyers to dealing with uncertainty about their futures, tensions can run high for your tenants. But they don’t have to.
The key is to clearly inform your tenants of what your intentions are and how they might be affected if a sale takes place. Making sure you or your broker relay that information clearly and thoughtfully ahead of time, will make a big difference.
Here are four things you should never tell your tenants:
1.) It Will Be Up to The New Owner to Decide What Happens to Your Leases.
True, but only with regard to renewing or extending leases. Your tenants have rights and those rights granted by the leases will be transferred with the sale. The new owner will be obligated to honor the terms of the existing leases. It’s important to be very clear when it comes to discussing leases with your tenants. What might be just an income producing asset to you, is their …read more