How Doing Tenants A Favor Before Selling Can Cost You

Every now and then I run into a Minneapolis or St Paul duplex seller who’s grown very fond of their residents. Sometimes that results in that owner wanting to protect them during the selling process and beyond.

The most common way I see this manifested is by the seller wanting to sign a long-term lease extension at below market rent before putting the property on the market.

The trouble is, the buyer then inherits that lease. That often means the difference between the duplex being either an affordable place for them to live, or between it being a good or bad investment.

Last week I saw exactly this scenario from the buyer’s side. A client wrote an offer on a property with one vacant unit, and one where the seller had clearly just signed a lease extension, as it ended in May 2026. Had that lease been anywhere close to market rent, it wouldn’t have been an issue. However, it was nearly $300 per month below that.

That’s $3600 per year.

On a duplex, that’s the difference between positive and negative cash flow. And for an owner occupant who has to bridge that gap, it may simply render them unable to afford the property.

That means fewer buyers can afford or make sense of the property. The less demand there is for something, the less it’s worth.

In theory, that means a small act of kindness can end up costing a lot.