As an Alpharetta rental property investor, you have numerous options to decide on when purchasing your next property. If listings are too few or you’d rather buy into a turn-key property, having possession of a property with current tenants could most certainly be quite lucrative. At the same time, however, there are some very important things you need to take into account 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 kick off your search, you should be knowledgeable of the advantages of buying an occupied rental property.
First of all, getting a rental property with current tenants means the property is already bringing in income. This could most certainly be a big plus if you’re looking for immediate cash flow or adding to your portfolio quickly. On top of 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 great time-saver for you as the new owner resulting from the fact 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 distinguish the useful benefits of buying an occupied rental property, there are a few things you need to consider before making an offer.
The Lease Comes with the Property
Primarily, it’s crucial to comprehend clearly 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. Similarly, you will be held to the lease terms in place, as well as the monthly rental amount, due date, late fees, etc. If the tenant fails to pay rent or damages the property, you’ll likewise be responsible for those issues.
Property Condition May Vary
It’s secondly necessary 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 do not know of. Because of this, it’s substantial to have a professional home inspector carefully go over the property in preparation for making an offer. Hence, you can be confident that you’re buying out a property in good condition.
Potential for Unhappy Tenants
Also, take note, that you need to be ready for the likelihood of having unhappy tenants. Almost always, selling a rental property with existing tenants can happen smoothly, and there may be one or more hiccups. But that is not always the case. Even if you inherit good tenants, they may not be ecstatic about getting a new landlord. The sale of a property is a big deal to many tenants and may bring about 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 probably find these changes anxiety-inducing and unpleasant.
Potential for Uncooperative Tenants
Another potential issue that may come about with an existing tenant is that they wouldn’t want to respond to requests for screening documents or set a time to inspect and perform maintenance on the property. When you buy a rental property with current tenants, it’s very important to communicate effectively.
Property Management Plan
One final matter, it’s critical to have a realistic plan for managing your rental property. Owning rental property comes with a lot of work and responsibility; working closely with expert local Alpharetta property managers is substantial to get your rental property in shape and communicate effectively with existing tenants. A good property manager can help smooth the way to profitable, long-term rental property ownership.
Purchasing a rental property with current tenants comes with its own set of benefits and challenges. Nevertheless, if you’re eager for those challenges and have the right and expert people on your team, you can successfully find a great 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 Executives Greater Atlanta at 678-765-8383 today!
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