6 Tips For Taking Over Income Property

So you are set to close on a property, containing multiple tenants which you are now assuming and responsible to. Here’s some ‘tips’ to ensure a smooth transition:

1. Preferred Method of COMMUNICATION – simply what is the best means to connect with you to discuss a tenant matter and what is the expected response time. Do you prefer email, text or a call? Whichever it is – clarify the preferred means upfront.
2. Preferred Method of PAYMENT – most common today are direct deposit or email transfer. But is cheque acceptable and how it is delivered (mail or pick-up)? All forms of payment may work, but lay out the expectations so all sides are clear.
3. Arranging REPAIRS/MAINTENANCE – what do your tenants expect when a repair has to made? Can they be done during business hours and can tradespeople have easy access to the premises? Do you have an on-call list of trades people, for handling such repairs? More questions then answers - but it’s all about expectations and managing them on both sides.
4. Preparing premises for NEW TENANTS – readying the space for a new tenant is often full of expectations that need to be met. What are your responsibilities on possession date? What is required of them at takeover? Will there be a walk-through on possession date and even a checklist report completed? Best practice, is to have a system and employ it. In the case of new tenants, you can also establish the groundrules.
5. Understanding the BUSINESS OF EACH TENANT – beyond the lease agreement that you assumed, spend some time understanding the Tenant’s business and how it affects the overall property. Is it a quiet office environment vs. a busy retail operation? Does it draw considerable traffic (parking demand), and what sort of hours of operation are involved? Is it compatible with the neighbouring units? Are there operational issues which you may be assuming buy may have missed during your due diligence process?
6. Keep Good TENANT FILES – not simply about keeping track of rent and expenses. Files should include all tenant communications, written notices, and future plans for the space (ie. expansion). Even if you did not assume good files at closing, make a habit of establishing a better system going forward.

The above should help to make a good first impression with your Tenants at closing. Again, it’s all about expectations --not only setting them, but managing them! Love to hear about any stories about problem takeovers, on past deals…

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Mark Lalovich
mark@lalovichrealestate.com
Office: (519) 966-0444
Cell: (519) 259-5434