How to find the best Existing tenants

Question

We're looking to do our 5th SFR buy and hold in Philadelphia. All of existing properties required rehab and we selected tenants. With our 5th, we want a break from major rehabbing and are specifically looking at properties with tenants in place. Any tips on how to minimize chances of selecting awful tenants? Also with the 4 existing properties they are all section 8 so we haven't had experience with non payments and have been fortunate with tenants who have appreciated the rehabbed properties. Thoughts? Words of wisdom on our current search?

Angela Henderson · Answer

Thanks for this perspective! It makes the most sense! Property demand is the better way to evaluate.

Jill F. · Answer

We have found inherited tenants to be a crap shoot. It seems like the best property deals often come with worst tenants or tenants paying way under market. I have never chosen a property because of a tenant but I have ruled out marginal properties because of tenants ("drug dens" and "hoarder houses"). If your goal is to avoid rehab, focus on getting an already rehabbed property so that if it turns over you don't have too much to do.

Matt K. · Answer

Probably best to start by defining best.......For example, the person that always pays on time might not be the best if they are below market. Or conversely the one who is above rent but is a hassle to chase down the rent might not be the best either.I'd look for a property that is in demand, then it doesn't matter as much about current tenant or vacant. If you have that in demand property.... and people actually want to live there vs it's their only choice you can screen and pick the "best".