Determining if a house is used for rentals
Hello BP community, I am moving much closer to purchasing my first deal. Well, actually doing much more targeted research now as opposed to only education. In any case, my question is, how do I determine if a home is being used as a rental property?
I have looked through my country tax assor to see which homes are being taxed as multi-family (whiche means they must adhere to code in my town, ie kitchen in each unit, bathroom etc). However, I have not been able to confirm if these homes are in fact being used as rentals. Any advice would be very helpful please?
If you have the access in your county, check to see where the tax assessor is mailing tax notices. A different mailing address on file could indicate an income property as well as out of state owners.
@Lisa Kohl thank you very much, I found that information on another county form!
There is not a concrete way to know for sure based upon online search results but you can work your way to a very good educated guess with a high level of certainty.
1) google the property address. If it was ever advertised for rent, it should pop up in the first couple pages of search results. Sometimes you can see it was previously listed directly in Zillow.
2) look at the tax assessor records like mentioned above. Things to look for are different mailing address. While this could be a clue, depending on location, it could also be a seasonal home. Boca Raton Florida property with mailing address in New York....could be seasonal home. Tulsa, Ok.....more likely a rental...this is not a place people come to escape summer or winter. Is it registered in a business entity or personal name/land trust? While lots of rentals are registered in the primary owners personal name, not many primary residences are registered under an LLC.
3) Next, search the tax assessor site based on the registered owners name. Do they have more than one property? could be rentals....not many people own multiple residential properties in the same county without putting them to work as rentals.
4) look at the tax status? Is there a Homestead exemption filed? While a homestead exemption filed is not ironclad proof that it is a primary residence, it is a pretty good indicator. That is supposed to only be in effect for primary residences but people sometimes (let's assume accidentally) forget to withdraw the exemption status after moving out of the property. If they file for it on their new property in same county, it automatically gets removed from the other property. If they don't apply for it, or move out of county, it could possibly remain.
From an online sleuthing perspective, these are the main ways I try to determine how a house is being used.
@Chris Simmons This is very helpful...thankfully I'm in not looking in a vacation area!