Chicago · 2 to 4 unit buildings
Here's the short, calm answer: they stay, their leases come with the building, and you start collecting rent the day you close. Buying a building with people already living in it sounds complicated from the outside. In Chicago it mostly runs on a few clear rules with clear timelines, and once you see them, the fear that stops most first-time buyers gets a lot smaller.
In Illinois, a lease attaches to the property, not to whoever owns it. When you close, you step into the old owner's shoes. Same rent, same end date, same terms. You can't change the deal mid lease, and the tenants can't walk away from theirs either. That cuts both ways, and both cuts favor a steady first year. You have paying tenants from day one, and they have a home with rules that didn't change overnight.
Month to month tenants come along too. Their arrangement keeps going until you or they end it with proper written notice. And any security deposits the tenants paid should be handed over to you at closing, which your real estate attorney will sort out with the seller's side as routine paperwork.
Say you want to raise a rent or not renew a lease down the road. Chicago's Fair Notice rules give everyone a schedule based on how long the tenant has lived there. Usually it works like this: 30 days of written notice if they've been there under six months, 60 days if it's been six months to three years, and 120 days past three years. The same clock applies to rent increases, even small ones. We say usually because a small pilot area on the South Side near Jackson Park uses longer timelines.
Two details worth knowing. The clock follows the tenant's time in the unit, so a tenant who has rented there five years is a 120 day tenant even though you just arrived. And these notice rules apply even to owner occupied buildings of six units or fewer, which are otherwise exempt from most of Chicago's landlord tenant ordinance. So the playbook for any inherited tenant is simple: honor the lease, then use the notice schedule. No guesswork.
Then the tenant question gets settled before you offer, not after. You can look for a building with a vacant unit, pick one where a month to month unit gives you a clean timeline under the rules above, and buyers sometimes negotiate for the seller to deliver one unit empty at closing. This is normal deal-shaping, and it's part of what we help you think through.
Sometimes the rents in place are lower than what similar units get nearby. That's not unusual, and it's often part of why the price works. A longtime owner who hasn't raised rents in years is often the same owner pricing the building with room in it. You're buying the building as it runs today, so run the numbers on today's rents first. You can do that yourself with our deal analyzer and see what a building looks like on its actual numbers. If it works at the rents in place, anything you do later with proper notice is upside, on your timeline.
Screening your next tenant in Cook County follows the Just Housing rules, and they apply to every housing provider, including the owner of a single two flat living downstairs. The short version: you qualify applicants on things like income, credit, and rental history first, and only then look at criminal background, where only convictions less than three years old can even be considered, with a fair individual review. It's a defined two step process. Once you've run it once, it's routine.
None of this is legal advice, and your attorney handles the fine print. But the big picture is the part most buyers never hear: the tenants are not a problem you inherit. They're rent you inherit, with a rulebook attached.
If you're looking at a building with people in it and want to talk through what you'd be stepping into, reach out. You don't need to know exactly what you want yet, most people who reach out don't.