Start with Rehab or Inherent Tenants

[Antoine Baisy]

For my first rental property, I would like to buy and hold a duplex. Looking around my area, the deals I see on the MLS are either in need of serious rehab or already have tenants. Since this will be my first rental, I was wondering what you think would be better to start with, rehab or tenant. It seems like there are pros and cons to both strategies. Here are a few I see:

Pros for Rehab: You get to see and correct the condition of the house immediately, you get to screen your tenants before giving them the keys

Cons for Rehab: time and $$ in rehab work, no income until you can find tenants for it

Pros for Tenants: Income right away and no need for immediate rehab (hopefully)

Cons for Tenants: Do due diligence to ensure income-generation (evaluate lease and rent details), mystery quality tenants, unable to fully inspect house condition

Where would you begin?