As a Fuquay-Varina rental property investor, you have various options to select when obtaining your next property. If listings are sparse or you’d rather buy a turn-key property, procuring a property with current tenants is perhaps quite lucrative. At the same time, however, there are various things you need to grasp before acquiring 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 get going with your search, you should be aware of some benefits and advantages of buying an occupied rental property.
First and foremost, possessing a rental property with current tenants specifies the property is already getting income. This is perhaps a big plus if you’re searching for immediate cash flow or want to add to your portfolio quickly. Also, 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 major time-saver for you as the new owner for the reason 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 grasp well a few of the benefits of buying an occupied rental property, there are a few things you need to consider when making an offer.
The Lease Comes with the Property
Principally, it’s significant to comprehend 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. Also, you will be held to the lease terms in place, together with the monthly rental amount, due date, late fees, etc. If the tenant fails to pay rent or damages the property, you’ll similarly be responsible for those issues.
Property Condition May Vary
It’s moreover very important 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 unaware of. Consequently, it’s vital to have a professional home inspector see the property just before making an offer. Thus, you can see to it that you’re making a purchase of a property in good condition.
Potential for Unhappy Tenants
Last but not least, you need to understand the probability of unhappy tenants. In most instances, selling a rental property with existing tenants can go well, and with only some issues. But that is not always the case. Even if you inherit very good tenants, they may not be glad about getting a new landlord. The sale of a property is a big deal to many tenants and may develop into 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 may find these changes disappointing and unpleasant.
Potential for Uncooperative Tenants
Another potential issue that may happen with an existing tenant is that they don’t desire to respond to requests for screening documents or set a time to inspect and perform maintenance on the property. When you procure a rental property with tenants, communicating effectively is basic.
Property Management Plan,
In conclusion, having a realistic plan for managing your rental property is relevant. Owning rental property comes with a lot of work and responsibility; taking advantage of expert local Fuquay-Varina property managers is vital to getting your rental property in shape and communicating effectively with existing tenants. An ideal property manager can help smooth the way to profitable, long-term rental property ownership.
Owning a rental property with current tenants comes with its own set of benefits and challenges. But certainly, if you’re ready for those challenges and have excellent people on your team, you can find an awesome 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 Excellence at 919-827-1107 today!
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