Hello. I'd like to purchase a rental property, and I was wondering what questions I should ask the seller?
1. Tell me about the property
2. Current lease terms ( amount, length etc.)
3. Length of time current tenants have been in place and how well they've paid, taken care of property etc..knowing info. may be biased
4. Monthly costs ( utilities if included, management, taxes, maintenance)
5. Updates and dates completed ( especially age of roof, a/c, etc..)
6. Owner financing possible
I'm sure I'm missing something. Please help me fill in the gaps.
Always nice to run into a fellow Wendy!
For 2-5, you can ask these questions while looking but make sure, in the event that you make an offer, that you make receiving documentary evidence prior to closing. If the owner says he has every apartment fill and the rent checks are falling into his bank account every month on time, he needs to give you proof of this. You need to see the leases, when the rent checks get paid, actual receipts of when that roof was replaced, etc which show that the work (especially major items) was done by licensed contractors and so on.
@Wendy Noble Hi Wendy! It's unfortunate that so many are dishonest. Great advise that I will be sure to follow before signing anything. How are things in New York?
not as nice as it must be by the beach!
It's not so much that they are dishonest, but they are trying to sell you something and want to make it look good. Also, asking for substantiating documentation is a good negotiation strategy. "Oh, you didn't keep detailed records of tenant receipts, I'll have to take something off my offer because I don't know what kind of risk I'm taking on".
I recently bought a condo and by reading through the last two years home owners' association meeting minutes, I could see that there was some major maintenance projects coming up (read: special assessments that will come due) in the next 2 years. I expressed my doubts and adjusted my offer accordingly.
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