I’m currently in the process of buying a 3B1B home that has tenants. I’m curious if it is better to let the tenants stay or “start fresh” with a tenant of my screening and choosing? The house needs work in my opinion (like a new roof) but the current tenants are happy and want to stay. If I let them stay I would put off some of the work that isn’t necessary like opening up the very small kitchen, which would be cheaper up front for me but my biggest fear is inheriting a horrible tenant that either trashes the place or doesn’t pay on time. What have you done in this situation? The seller has accepted my offer and the home inspection report came back so I’m waiting to see what the sellers response to my “list of demands” is. My real estate agent hasn’t mentioned if the seller will have the tenants out by closing or not. It all seems very vague and is making me nervous. How does a transaction like this usually go down?
Depends on your preference and that of your lender. Depends on how your funding the deal, having current tenants will make financing go a lot smoother. Not all inherited tenants are bad. Ask the current landlord or PM about the current tenants and their history. I would take their advice with a grain of salt. They may just not want to deal with the issue. It would show on their P&L statement though if the tenant is missing payments. Maybe even go as far as asking the neighbors. The neighbors will be very upfront about how great or not so great the current tenants are.
I believe there's also a form that you have the tenant sign once you take ownership. You would have to abide by the current lease they had with the previous landlord though. So if they are late the first month, then set them right. Then throw some notice to perform at them, then boot em if they don't abide by the contract.
@Patrick Senas The financing isn’t an issue in this case I’m putting 20% down with a conventional loan and my lender has pre-approved me without tenants. I would love to have a conversation with the seller but all communication so far has been with our real estate agents so it seems like a very combersome process. I don’t know how to start the conversation either because I’m afraid if I start asking about the current tenants then I’m opening the door for them to stay when I haven’t decided if that is what I want yet. At what point does the responsibility of getting the tenants out become my problem instead of the sellers?
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