Purchasing with Tenants in Place
Hi everyone, does anyone have any thoughts or experience buying properties with tenants in place? Pros and cons? We are hoping to purchase our first property in the next couple months and have found several with tenants already in them willing to stay. The immediate cash flow would be nice and it would be good just to get our landlord sea legs under us, but we also were considering a BRRRR to be able and pull the cash out for our next property. Curious to know what people think. Thanks in advance!
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#3 General Landlording & Rental Properties Contributor
- Rental Property Investor
- Indianapolis, IN
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#3 General Landlording & Rental Properties Contributor
- Rental Property Investor
- Indianapolis, IN
@Catie Baker The biggest challenge of purchasing occupied property is the baggage that comes along with the tenant. Because you didn't screen them, you didn't ask questions, you didn't judge them, you really won't know who you're dealing with. It's safe to assume when the tenant(s) find out the property sold they will need coaching. If they were paying rent on time every month with cash you're either excepting that form or change the status quo from DAY 1. Old leases need to handed over or new leases need be signed and contact information exchanged.
100% agree about getting your landlord sea legs. It's a great way to see if buy and hold rentals are for you. I hope you find a deal and get started on the journey. Run the show as a business and treat tenants fairly. It's a great way to grow personally and professionally.