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Updated over 17 years ago,
Verify Rents before Purchase? What to do with realtives?
1) I have a 6 unit property I may make an Offer on. The landlord had leases but all the leaes have long expired. So, technically they are Tenants at Will or "month to month." How do I verify the "real" rents? The owner tells me they are $550, 525, 575, etc. But I could take ownership and the tenant tells me otherwise. I could imagine myself showing up the first month and the tenant tells me, "oh, no I have been paying $350 per month for ages."
2) How would you handle the following: one of the tenants is a relative of the owner and is paying little or no rent. If I buy should I have that unit vacant or take the building with the relative and hope I can negotiate a rent from a person who was living free for ages? I could imagine that this realtive will resent that they now have to actully pay. Seems like a headache will follow.