The People I’m Buying My House From Wanted Their Tenant to Stay for a Month After Closing. Here’s Why I Said a Hard No

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If you’re thinking of buying a property with a tenant living in it, you should be aware of the potential risks and downsides. Here’s what you need to know. 

The house that I’m buying has a separate in-law apartment that is located above the garage. The people who I’m purchasing the property from wanted me to allow the tenant currently living in that in-law apartment to stay for a period of time after closing.

I said a hard no to this and, in fact, delayed closing for several months so they would have time to get the tenant moved out before we moved in. Here’s why I was unwilling to even consider the possibility of allowing a renter to stay on my property after I purchased it.

Being a landlord carries a ton of risks

I got a mortgage and purchased my house to have a place to live with my family — not to buy an investment property. I do not want to have a stranger living so close to me in a garage apartment in my house.

I also don’t want to take on the risks associated with having a tenant. My home insurer told me that my costs would have been higher if I had a tenant on the property, and there was also the chance the tenant wouldn’t take care of the space and would leave me with costly repairs to make. My accountant also warned me that having a tenant could affect my ability to claim a homestead exemption on the entire property, which could affect my property taxes.

Now, some people may want to own rental properties, or buy a multi-family property and live in one unit while having a tenant in another. And this can be a good arrangement if you are prepared and ready for it, since your tenant’s rent can cover some of the cost of your mortgage.

But, this wasn’t something I wanted to sign on for. And if it’s something you are considering, you should be sure to talk with an insurance agent and an accountant about the implications of your decision.

Removing a tenant can be a huge hassle

Another big reason I was unwilling to let the tenant stay after closing, even for a few months, is that I was afraid that ultimately she would not leave.

She wasn’t very happy the owners were selling the house to me (based on communications I had with her when we visited the home) and she did not want to move. And it can be very hard to actually remove a tenant even if their lease is up.

Landlord tenant laws rightly protect people from unfair actions on the part of a landlord. But, the safeguards make life harder in situations where tenants don’t cooperate. Landlords can’t just change the locks or turn off the utilities or remove the tenant’s stuff if they won’t leave, even if they aren’t lawfully occupying the property anymore. Removing a tenant who doesn’t voluntarily depart could mean going to court, getting a court order, and getting a sheriff to enforce it.

I had no interest in trying to figure out how to evict someone or personally being responsible for having someone removed from their home. So, I said I would wait until the current owners could deliver the property vacant.

Be careful when buying a home with a tenant

If you are thinking about buying a house with a tenant living in it, you should be aware that the transfer of ownership to you does not automatically mean the lease will terminate. You’ll have to abide by its terms. And if the tenant doesn’t leave or comply with the lease requirements, you’ll be the one who has to go to court.

If you aren’t willing to take on these responsibilities, consider either passing up on buying a tenant-occupied property, or put off your mortgage closing and make delivery of a vacant property a condition of your sale. That way, the current owners have to deal with any problems associated with removing the tenant and you can move into the home without worry.

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