Buying properties with housing tenants

2 Replies

All

So I have read numerous articles about purchasing properties with existing tenants, some positives/some negatives.  

How do you account for the potential capital repairs/replacements when the tenants are present and could potentially have to wait several years to upgrade the properties?  

Do you still include the potential rehab cost in your calculations and just prepare to do them when the lease expires?  

Thanks

As long as the expected rehab date is within your planned hold period, why wouldn't you include these costs in your calculations?  You will still incur the costs that will affect your total return, just not immediately.

That is a good point.  Include the costs in deal analysts and prepare for the repairs some time in the future.