New landlords who acquire properties with sitting tenants face an immediate income opportunity alongside legal constraints. Existing tenants typically remain protected under the lease terms and local rent control laws established before the property changed hands.

The primary advantage is cash flow from day one. Tenants already occupying the property means no vacancy period, no leasing costs, and no tenant screening delays. Income starts the moment the deed closes.

The catch lies in rent increases. Most jurisdictions cap how much landlords can raise rents, even with new ownership. Many states enforce annual increase limits ranging from 3% to 5%. Some cities like San Francisco, Los Angeles, and New York enforce stricter caps or require just-cause eviction provisions that protect sitting tenants from displacement.

New owners must review existing leases carefully. The lease terms bind the new owner. If the previous landlord locked in a below-market rent, the new owner typically must honor that rate until lease renewal. Lease renewal dates determine when rent adjustments become possible.

Documentation protects both parties. Keep copies of the original lease, any amendments, and written communications with tenants. Follow local notice requirements precisely. Many jurisdictions require 30 to 90 days' written notice before implementing rent increases, and some require specific language on the notice.

Eviction protection laws vary widely by location. California, Illinois, and Oregon impose "just cause" requirements, meaning landlords must have legal grounds like non-payment or lease violations to evict. Without just cause, evictions fail regardless of the reason.

Smart landlords maintain these tenant relationships. A stable tenant paying rent on time costs less than turnover expenses, eviction proceedings, and vacancy losses. Minor rent increases paired with responsive maintenance often outperform aggressive tactics that trigger relocations.

Before purchasing any occupied property, consult local housing authority guidelines and an attorney familiar with your jurisdiction's tenant laws. The