What do you do with existing tenants?

[Harry Smith]

Newbie here!

Let's say you're buying an investment property. The seller offers to deliver you the property with existing tenants or vacant. So you have both options.

Which option would you choose and why? Would you like to keep the existing tenants or would you like them out?

[Ray Hage]

It can be good either way and mainly depends on the circumstances. If the property was recently renovated and they brought in new tenants who are paying market or above market, you can't ask for anything better. If it is in tough shape and you have difficult tenants, it won't be as easy and you may want to get a discount on the property.

However, if I were forced to choose, I would usually go with empty as there is almost always a light repair or upgrade that can be made to get a higher rent for the next incoming tenant. Any time a tenant moves out is also a good time to make some upgrades if the local market supports it.