Buying property with tenants already in place

[Antonio Verderosa]

Before purchasing a property with a tenant currently living there,what are some of the questions/things i should look for to insure i do not have problems in the future?

[Patricia Steiner]

Here's what I recommend when buying a property with tenants in place:

1.  Obtain the rent roll and leases.  Have the tenants consistently paid on time?  What time is remaining on the leases?  How long have the tenants been there (just through current lease period? Longer?). Are the tenants required to provide renter's insurance and did they provide it?  What happens at the end of the lease term? How much notice must each party give for non-renewal?  How do tenants remit rent (electronically, check)?

2.  Obtain any screening information.

3.  Inspection reports.  Has the current owner been completing regular inspections?  What were the findings?  These indicate the tenants' respectful use of the property.

4.  Security Deposits. Were they collected and where are they held?

And, you will want to walk the units.  You can tell a lot about the tenants when you do so.  

If any red flags appear, you can always make your offer contingent upon the property being vacant at closing.  I like buying properties with tenants in place from (here's the clincher) - business people.  The owner/landlord who actively recruits quality tenants and manages the property to the contract is the person who you want.

Congrats on your soon-to-be new acquisition.  And, you're smart to be doing this research upfront.