Moving Out A Single Roommate.

Should you allow just one roommate to move out of your rental property and leaving the others?

How do manage that?

Read the transcript on how to move out a single tenant here.

Today’s question comes from Saf Tanaka.

“I have a property with two tenants. One of them is going to be removed from the lease. I don't know what to do!”

For me, this is actually an easy question! Tenants come to you because they are often entering their next phase of life. They may be upgrading into one of your units as their next phase, or maybe their upgrade is the new job that brought them into Philadelphia. As a property owner, you provide the means for their current life circumstances, but as time goes on, they might move on to another phase. For example, some tenants might someday begin pursuing home ownership. A lot of our rentals are higher-end rentals, and many of the folks that rent properties from us are now moving on to owning homes of their own.

When it comes to roommates, we love roommates. Not all of the owners that we represent feel this way, but we actually prefer roommates over individuals! This happens less often in two-bedroom units, but in circumstances where we have three or more bedrooms, that seems to be the magic number. What typically happens is that one of the roommates will inevitably approach us and say, “I really wanna break my lease. I really want to move on to the next phase of my life.” As property owners, we love that situation and are absolutely willing to help them. At this point, we get the other tenants to sign a paper agreeing to take financial responsibility for that tenant. Next, we're going to nicely escort that tenant off of the property, and now the existing tenants are responsible for finding a replacement roommate.

The current tenants do all the work to find the replacement, so the owner is not actually being charged a leasing fee. If we need to find a new tenant and there’s been no progress on that front, we simply charge them a one-month fee. If the tenants replace the roommate, there's no need for that fee, which is the perfect situation for the owners.

Now, once the new roommate is brought in, the dynamic that often occurs is that the new roommate feels like he's the odd man out; he's the one that was just added on. To alleviate this, we take extensive steps to make that new tenant feel as though he's an existing tenant. So, we draw up a whole new lease so that he's included as a super official third roommate. We do this because that last-minute added-on roommate might someday be the last man standing. The other two roommates might eventually move on to the next phase of their lives, but maybe this new tenant will be a constant. In that case, he’s going to eventually replace the other two roommates; then, the cycle will repeat and one of them will be the last man standing.

In fact, we have several units that we've had for years that have never been vacant. Their roommates just keep replacing themselves, and we facilitate this process. I don't want to say that we encourage it, because we don't. We don't do anything in particular to make it happen, but when a tenant approaches us and wants to move out, we offer some flexibility and make sure they can if the other tenants agree. We then bring in a new tenant in or, better yet, have the tenants replace their old roommate. The new person goes through our whole application process, so we do a full criminal credit background check on them and create a full new lease. By following this process, you can avoid vacancy, which is incredibly expensive for an owner.

So in short, if one of the roommates in one of your units wants to move out, there's absolutely no reason not to let them. It can only be a good thing!


Joe White

Joe White is a Philadelphia Property Manager and Real Estate Broker. He is the owner of Grow Property Management and has been involved in the management, sales and purchases of Philadelphia area rental investment properties since 2008. He is an author and works as a real estate investment consultant and construction manager.

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