Delivered Vacant vs Keeping Tenants

[Thomas Pierce]

I been looking to purchase investment property in some harder areas with the intention of buying and holding. Collecting an income from rentals. what are some of your opinions on buying with tenants vs. vacant properties. What advice can you give on both scenarios. Your input is greatly appreciated.

[Steve L.]

Existing Tenants
They usually don't expect much fix-up as they are already living there. The landlord has trained them (good or bad) on how the relationship is going to work.

I would look for:
- Payment records for the last 12 months (if you could see if they paid on time/late/early).
- How long they have lived in the property.
- If rent is under/at/above market.
- Are they on Section 8 or any other programs?

If I did buy the place with the tenant and wanted them to stay, the first thing I would do is go in there and fix something up (new flooring, new appliances) just to show you care about the place and will be making improvements. After you do that you can ask for a rent increase, etc.

Vacant Properties
I'd prefer vacant properties, especially if you are comfortable with the area. Be picky on your tenant selection, especially at the start.

If the area is real rough, you might have a problem with vacant units getting vandalized.