As a Tampa rental property investor, you have considerable options to choose from if, as it happens, the time comes for you to buy your next property. If listings are hard to find or you’d rather buy into a turn-key property, owning a property with current tenants could surely be quite lucrative. At the same time, however, there are a few things you need to understand before taking 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 set out on your search, you should know well the benefits of buying an occupied rental property.
First and foremost, having possession of a rental property with current tenants simply denotes the property is already bringing in income. This could surely be a big plus if you’re trying to get immediate cash flow or add to your portfolio quickly. Furthermore, 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 huge 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 know a bit about the 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
First, it’s really important 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. Secondly, you will be held to the lease terms in place, as well as with the monthly rental amount, due date, late fees, etc. If the tenant fails to pay rent or damages the property, you’ll, over and above that, be responsible for those issues.
Property Condition May Vary
It’s also critical 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 not aware of. Therefore, it’s beneficial to have a professional home inspector go carefully over the property before deciding on making an offer. Thus, you can surely be confident that you’re purchasing a property in good condition.
Potential for Unhappy Tenants
Another thing to prepare for is having unhappy tenants. Customarily, selling a rental property with existing tenants will be alright, and there might be just a handful of issues. But that is not always the case. Even if you inherit perfect tenants, they may not be exhilarated about getting a new landlord. The sale of a property is a big deal to many tenants and it may create 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 irritating and unpleasant.
Potential for Uncooperative Tenants
Another potential issue that may come up with an existing tenant is that they wouldn’t always 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 integral to communicate effectively.
Property Management Plan
On that note, it’s really important to have a realistic plan for managing your rental property. Owning rental property comes with a lot of work and responsibility; employing expert local Tampa property managers is beneficial to get your rental property in shape and communicate effectively with existing tenants. A professional 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. Still, if you’re mindful of preparing well for those challenges and have the ideal people on your team, you can surely find a splendid 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 TradeWinds at 727-400-4722 today!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
