As a Wake Forest rental property investor, you have innumerable options to select from when you’re about ready to acquire your next property. If listings are quite a few or you’d rather buy into a turn-key property, an investment property with current tenants could be quite lucrative. At the same time, however, there are specific things you need to learn before deciding to buy a tenant-occupied rental property. Read on to learn how to buy a single-family rental property with current tenants.
Benefits of Buying an Occupied Rental Property
As you start your search, you should realize the benefits and rewards of buying an occupied rental property.
First thing, obtaining a rental property with current tenants happily signifies the property is already bringing about income. This is most certainly a big plus if you want to have immediate cash flow or add to your portfolio quickly. Over and above that, since the property is already generating rental income, it will likely be easier to get approved for financing by traditional lenders.
Another benefit is that an occupied rental property means that there is already a renter in place who is familiar with the property. This can be a significant time-saver for you as the new owner given that you won’t need to spend time and money marketing the property and screening potential tenants.
Things to Consider Before Buying
Now that you know the very real benefits of buying an occupied rental property, there are a few things you need to consider in preparation for making an offer.
The Lease Comes with the Property
Firstly, it’s basic to know that you’ll take on the current tenant’s lease when you purchase the property. You’ll be responsible for any repairs or maintenance issues during their tenancy. Likewise, you will be held to the lease terms in place, in addition to the monthly rental amount, due date, late fees, etc. If the tenant fails to pay rent or damages the property, you’ll certainly also be responsible for those issues.
Property Condition May Vary
It’s as well key to take a very careful look at the property’s condition. Even if the tenant has been taking good care of the rental unit, there could be underlying issues you’re probably unaware of. Precisely why, it’s significant to have a professional home inspector examine the property before making an offer. In this manner, you can always make certain that you’re acquiring a property in good condition.
Potential for Unhappy Tenants
Additionally, you need to get ready for the likelihood of unhappy tenants. Most of the time selling a rental property with existing tenants goes well and there are a small number of issues. But that is not always the case. Even if you inherit the ideal tenants, they may not be overly excited about getting a new landlord. The sale of a property is a big deal to many tenants and may elicit feelings of betrayal or discontent – especially if they’ve lived there for a long time. If their previous landlord did not visit the property often or raise the rent, they could most definitely find these changes discouraging and unpleasant.
Potential for Uncooperative Tenants
Another potential issue that may take effect with an existing tenant is that they don’t like to respond to requests for screening documents or set a time to inspect and perform maintenance on the property. When you invest in a rental property with current tenants, it’s beneficial to communicate effectively.
Property Management Plan,
In the final analysis, it’s imperative to have a realistic plan for managing your rental property. Owning rental property comes with a lot of work and responsibility; partnering closely with expert local Wake Forest property managers is significant to get your rental property in shape and communicate effectively with existing tenants. The best property manager with the right skill set can help smooth the way to profitable, long-term rental property ownership.
Buying a rental property with current tenants comes with its own set of benefits and challenges. Be that as it may, if you’re conscientious about preparing for those challenges and have efficient people on your team, you can locate a superb rental property that will provide you with a steady income for years. For more information or to chat with a local rental market expert, contact Real Property Management Raleigh at 919-481-0008 today!
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