Updated over 1 year ago on . Most recent reply
Red Flag Tenant?
Here's the scenario: In escrow on property, seller provides rent roll and tenant is 10 days late on first months' rent. Note, lease was signed right before listing property, so this is first time rent has become due. Under lease agreement, tenant has 3 day grace period before late payment. So effectively tenant is 7 days past grace period. Is this a red flag for those who are experienced investors? This is my first out of state investment property and i want to make sure i'm not buying a sour deal with a problem tenant...
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#3 Managing Your Property Contributor
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#3 Managing Your Property Contributor
- Real Estate Agent
- Metro Detroit
@Ashley Ernst we disagree with @Mike Paolucci
While he could be right and this may be "normal", the opposite is too risky.
You haven't shared enough details, but what are the chances the seller is a flipper or turnkey provider who threw the first applicant they got into the property just to make a sale happen? You get stuck with a tenant you'll probably have to evict at some point, then repair any damages they've caused and then find a new tenant. What will all that cost?
Where is the property?
What Class is the property?
What is the tenant's credit score, income & job stability, rent payment history with previous landlords, etc?
How long has the seller owned this property?
How long has the property been a rental?
What repairs have been recently made according to your inspector?
Any recent building/electrical/mechanical/plumbing permits pulled at city?
Worse case, how many months of rent will the seller discount on the price to make you comfortable moving forward with the purchase?
- Michael Smythe
