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What Should I Do Right After I Purchase An Income Property?

We get these questions often, and the answer is pretty simple, contact your new tenants! They should know how to pay rent, request repairs, and report concerns.

For example, we sold a property where we received an emergency plumbing repair two hours after escrow had closed. As a result, the tenant had no idea who to call or what to do. Providing this information to a tenant upon purchasing the property will give the tenants a sense of stability and will discourage them from immediately starting to look for a new property.

Often, when income properties are purchased, rent for the tenants is low. Therefore, even though it is imperative that you start rent raises so that you can capture appropriate rent, it should not be the first thing you do.
If the rents are slightly under the market, it won’t take much time to bring them current, so wait a little bit.

An immediate rent raise can also unsettle the tenants or start the relationship on the wrong foot. If the tenants are far behind market rent, make a point to either have a conversation or send them a letter explaining your position and plans moving forward. This should be the case for all major plans on the property. Be upfront about your decisions, especially if you plan to give maximum rent raises or ask tenants to leave for unit remodels; this will prevent potential problems because the tenants have already been forewarned about your intentions.

The last thing you should probably do is get to know your tenants a little bit. There are multiple reasons this might be beneficial to your property management. Number one is they usually know the building; thus, they are aware of obvious problems. As a new owner, you need to get up to speed on what issues the building has—for example, reoccurring plumbing issues, problem tenants, and problems with neighboring buildings or the neighborhood.

Also, it might help you weather the storm of the initial rent raises or planned work at the building. Finally, they might tell you about problems in their unit. This is an excellent time to show the tenants that you are there to address their concerns, and it can go a long way to helping you with tenant retention.

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