Real Estate Investor · Staten Island , NY · Member since 2011 · 14 posts · 0 votes
I been looking to purchase investment property in some harder areas with the intention of buying and holding. Collecting an income from rentals. what are some of your opinions on buying with tenants vs. vacant properties. What advice can you give on both scenarios. Your input is greatly appreciated.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
15y
Existing Tenants They usually don't expect much fix-up as they are already living there. The landlord has trained them (good or bad) on how the relationship is going to work.
I would look for:
- Payment records for the last 12 months (if you could see if they paid on time/late/early).
- How long they have lived in the property.
- If rent is under/at/above market.
- Are they on Section 8 or any other programs?
If I did buy the place with the tenant and wanted them to stay, the first thing I would do is go in there and fix something up (new flooring, new appliances) just to show you care about the place and will be making improvements. After you do that you can ask for a rent increase, etc.
Vacant Properties I'd prefer vacant properties, especially if you are comfortable with the area. Be picky on your tenant selection, especially at the start.
If the area is real rough, you might have a problem with vacant units getting vandalized.
Real Estate Investor · Austin, TX · Member since 2011 · 271 posts · 106 votes
15y
It is enticing when tenants are in place but if these tenants trash the place, don't pay on time, and have your phone ringing all the time with nit picky issues it's a bad deal. I also find that sellers always claim that their tenants are perfect when nobody in fact is. If the existing tenants meet me screening criteria than great if not I'm taking it vacant. Now if the tenants have a lease and then maybe a cash for keys type of deal has to be considered.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
15y
Existing Tenants They usually don't expect much fix-up as they are already living there. The landlord has trained them (good or bad) on how the relationship is going to work.
I would look for:
- Payment records for the last 12 months (if you could see if they paid on time/late/early).
- How long they have lived in the property.
- If rent is under/at/above market.
- Are they on Section 8 or any other programs?
If I did buy the place with the tenant and wanted them to stay, the first thing I would do is go in there and fix something up (new flooring, new appliances) just to show you care about the place and will be making improvements. After you do that you can ask for a rent increase, etc.
Vacant Properties I'd prefer vacant properties, especially if you are comfortable with the area. Be picky on your tenant selection, especially at the start.
If the area is real rough, you might have a problem with vacant units getting vandalized.
Residential Real Estate Agent · Atlanta, GA · Member since 2010 · 2 posts · 4 votes
15y
Occupied is better! I specialize in selling cash flow properties to cash investors. It is always good to buy with an existing tenant so that you can come in to the deal making money on Day One.
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
15y
i prefer vacant properties as well....usually i buy from distressed sellers, meaning the tenants want repairs but the landlord has no money to fix up the property, OR, the tenants haven't been paying and they need to be evicted as soon as i buy the property...when buying an occupied property, check and double check payment history..it's very difficult to prove a tenant hasn' been paying for the last few months in court, when you didn't even own the building...you can't under oath say they didnt' pay bc you truly don't know..you were told they didn't pay by the previous owner, but that is 'hearsay' and won't count in court...i always budget to evict tenants but hope for the best..with vacant properites you can do the necessary fix up and screen and choose your own tenants, and train them the way you want...much preferred in my opinion!