Would You Buy a Rental Property That’s Already Tenant-Occupied?

[Christopher Rubio]

I'm a newer investor focused on out-of-state rentals in the $80K–$125K range, mainly looking at BRRRR or buy-and-hold properties. I keep coming across listings that are already tenant-occupied, and I'd love to hear from others who've been down this road.

On one hand, it seems convenient — instant rent, no vacancy, and less work upfront. But on the other hand, I’ve heard some horror stories about inherited tenants, unclear lease terms, or below-market rents that make it tough to cash flow or raise rent later.

For those of you with experience:

• Have you bought a property with tenants already in place?
• What went well, and what would you do differently next time?
• How do you properly vet the existing tenant and lease before closing?
• Would you recommend it for a first out-of-state deal, or is it better to start with a vacant property and pick your own tenants?

I’m trying to weigh convenience vs. control before jumping in — your experiences and lessons would really help me (and others in the same spot).

Thanks in advance,

CR

[Marcus Auerbach]

Inherited tenants are a coin toss. They can be great, but often times they feel they have seniority over the new owner, especially when they are older than the investor. This gets amplified if the new owner is a green landlord.

Most agents don't know what an estoppel letter is, just ask them to confirm the key terms of the lease and in person is almost better. Also ask what their intentions are, stay or leave, especially if you are planning to increase the rent, now is the time to tell them. 

If there is stuff in the attic and the basement the seller may tell you it belongs to the tenant and when the tenant moves out they will say it's not theirs, so now you have to deal with it. This BTW is a great example for a small issue if you are local - and a big headache if you are OOS and have to troubleshoot and resolve this remotely.

$80-$120k is probably the price range with the highest risk profile for a landlord. And the hardest to make a BRRRR work - take it from someone who has been BRRRR-ing for over 15 years in Milwaukee.