A tenant-occupied rental can look like a shortcut to cash flow — rent is already coming in, and you skip the vacancy and leasing work. But you are also buying someone else's lease, someone else's tenant relationship, and someone else's maintenance history. The questions you ask before closing matter more than the rent roll alone.

Start with the lease itself. How long is left on the term, what is the actual rent versus what is advertised, and are there options, concessions, or side agreements that are not in the main document? Ask for a rent ledger and proof of payment, not just a summary. A tenant who is current looks very different from one who is behind, even if the monthly figure is the same.

Next, ask about the condition and the history. When was the last walkthrough, what repairs are outstanding, and has the property had recurring issues that keep coming back? Ask who holds the security deposit and how it will transfer at closing, because that detail is easy to miss and expensive to fix later.

Also ask about the tenant relationship. How has communication been handled, are there any pending complaints or notices, and what are the local rules around notices, renewals, and non-renewals? Rules vary by location, so do not assume the process works the same way it does in your home market.

Finally, run the numbers as if you were starting fresh. Verify taxes, insurance, and realistic maintenance and vacancy reserves against the actual rent, not the pro forma. A property that only works if everything goes perfectly is not a safe buy.

What is the first thing you check when you look at a tenant-occupied property — the lease, the payment history, or the condition — and why?