Wanted to get some opinions on a situation we are having with our tenant.
Own a condo that we are slightly underwater on and have a very good tenant in there now. Market rent is probably $1,100 or $1,150. He has been in there for 2 years and has been paying $975 cash (was close to market when he moved in). Awesome tenant, always pays early. 60 years old, no pets, him and his wife live there after downsizing from their old house. Very neat and tidy. Repainted the entire place with my permission to neutral colors from the loud colors that were there when he moved in.
He now wants to continue his lease going forward at the same rate he is currently paying but is not willing to pay more even though he knows he is below market. He has 3 or 4 more years in Michigan before he retires and moves to his 2nd home in Las Vegas.
I keep telling my wife that it would be insane to kick out a perfect long term tenant that has very little risk even though he is below market. We might get another $150 or $200 a month, but it would likely sit vacant for a month and we could end up with a nightmare of a tenant that replaces him.
Yes, of course we only discuss this in the kitchen while she is making me a sandwich, obviously.
So what's the verdict? I'm not crazy right? Keep the good tenant and forgoe the additional rent that we might be able to get from a new tenant?
Keep in mind this is not an income property. Just trying to break even until values come up a little more and we pay down the mortgage enough to get out without bringing cash to closing.
Own a condo that we are slightly underwater on and have a very good tenant in there now. Market rent is probably $1,100 or $1,150. He has been in there for 2 years and has been paying $975 cash (was close to market when he moved in). Awesome tenant, always pays early. 60 years old, no pets, him and his wife live there after downsizing from their old house. Very neat and tidy. Repainted the entire place with my permission to neutral colors from the loud colors that were there when he moved in.
He now wants to continue his lease going forward at the same rate he is currently paying but is not willing to pay more even though he knows he is below market. He has 3 or 4 more years in Michigan before he retires and moves to his 2nd home in Las Vegas.
I keep telling my wife that it would be insane to kick out a perfect long term tenant that has very little risk even though he is below market. We might get another $150 or $200 a month, but it would likely sit vacant for a month and we could end up with a nightmare of a tenant that replaces him.
Yes, of course we only discuss this in the kitchen while she is making me a sandwich, obviously.
So what's the verdict? I'm not crazy right? Keep the good tenant and forgoe the additional rent that we might be able to get from a new tenant?
Keep in mind this is not an income property. Just trying to break even until values come up a little more and we pay down the mortgage enough to get out without bringing cash to closing.
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