looking at a 4BR/2BA for STR but it's tenant occupied

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looking at a 4BR/2BA for STR but it's tenant occupied

Member since 2024 · 179 posts · 76 votes

I'm looking at a 4 bed 2 BA SFH for a potential STR. My main concern is that it is tenant occupied. What if the tenants steal the appliances upon move out? What if the tenants do damage to the home during move out?

These are my main concerns about the property. Any advice on how to deal with these tenants prior to closing?

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John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

10mo

They might also refuse to leave and you have to go through an eviction.

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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
10mo
Did they post a security deposit with the current owner? That should transfer to you, so you can keep their deposit if they cause any damage or theft. You can also negotiate with the current owner/landlord to close upon their departure, or an additional escrow holdback predicated on no damages upon tenant departure. It is all negotiable, and subject to your states laws.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
10mo
They might also refuse to leave and you have to go through an eviction.
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Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
10mo
Them stealing appliances is probably low on the list of possibilities. Getting them out would be my concern. Is their lease close to ending? Would it make sense to require unit vacant at settlement?
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
10mo
Yeah @Marc Shin, I am with @John Underwood and @Jules Aton and @Andrew Steffens, getting them out is the main concern.
Frankly, I would avoid any tenant occupied properties. Where is it located? Location will play a big role in whether to move forward at all. If it was in CA then I would forget it, if it was in ID, then it could be OK.
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Nadeem Alamgir
Real Estate Agent · Member since 2023 · 831 posts · 577 votes
10mo
@Marc Shin

If you’re buying tenant occupied, make sure you get a copy of the lease, rent history, security deposit info, and a move in condition ifno as part of your due diligence.

Before closing, try to communicate with the tenants through the seller or property manager to confirm their move out plan and timeline in writing. You can also include a in the purchase agreement requiring the seller to deliver the property vacant and in similar condition as when you went under contract.

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