OfflineHi all,
I am looking at tenant-occupied rental properties to purchase. As part of my offer contingencies, should I request copies of the leases to review, should I request the tenant(s) deposits be transferred to me as part of the transaction, any other things I need to look for outside of the normal purchase stuff?
Also, I'm considering doing some "drive-bys" on the properties, and if possible, to chat with the tenants (unless the listing states not to bother tenants) to get the real scoop on the property. Would this be recommended or not?
Any thoughts would be greatly appreciated.
Regards, Robbie
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When you become the new Owner of property, the deposits, proration of rents all suppose to be credit to you Buyer. Not at all should it be a problem to talk with the tenants if they're willing to talk to you about the property. They can give you the inside scoop on whether the current owner is properly maintaining their Rental property and what's the neighborhood (e.g. crime,, amentities, etc) like that you're considering purchasing that property in.
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Welcome to the Dg Family. In my opinion I would request all info from the seller. I would have the seller's permision to speak to the tennants. So there are no red flags thrown up on their part. Transferring of the securities is all done in the closing end of it through your attorney if you are requesting them to stay in place. Any concerns about the properties can be addressed through a home inspection. Much success to you..........Lubertha
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Welcome to the DG family and it looks like you already go some great advice. I would find out as much information as possible and even consider asking how long each tenant has occupied the units and the rentalrate history of the past few years. They you can compare the rental rates to the market rates and better determine if the units could have increased rents when the leases expire. Good luck with this deal. Believe and Achieve!
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Get all the info you can. The tenants deposits should go to you no matter what, make sure you get them. Get copies of the lease agreement they currently have. Just don't go in rasing the rent as soon as you buy it, or else you will wind up with vacant units. My partner and I are buying a 4 unit and we are closing within the next 2 weeks, it is very good if you buy a property already rented. If all expenses are covered and you still have positive cash flow then you found a winner! You will be making money right off the bat. Good luck and keep us posted. Jeremy
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Welcome to the family.
I would ask as much information as you can. THe more you know the less you will be surprised. Make sure that you see how long the leases are for and if you want to renew with the current tenants. Make sure that the leases don't expire in the month you are taking over the property. Ask to talk to the current tenants to see if there are any issues that you may need to fix or change when you take this property over.
Good Luck and Happy Rentals.
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Sometimes the seller doesn't disclose "everything" so get as much info from the tenant as possible. The tenant may not disclose everything for fear of backlash from the owner. Sometimes the tenant hasn't been there that long and may not be aware of all of the problems yet.
We've made it a practice to talk to the neighbors of the property. Odds are if you are looking at a single family home, the neighbors have been around longer than the tenants. They will have the local scoop and gossip as well so you know what area you are dealing with. IE: kids who vandalize mailboxes, people with violent dogs, etc.
They have also heard the complaints from previous tenants such as: The furnace is junk (a new tenant may not have found this out yet), the foundation is messed up but the owner tried to cover it up with stucco, the roof leaked and the attic is full of mold so the owner closed it off, etc....
The neighbors will tell you the good, the bad, and the uhhhgly about the owner, the tenant, and the property.
Sometimes they give complete miss-information but at least you have a possible heads up for your due dilligence.
Real estate works...