Pet rent included in MLS rent amount

[Ryan Reynebeau]

We recently had an offer accepted on a duplex. One side is rented and the other is vacant. The MLS showed a rent amount of $1000 for the rented side. We estimated the rent on the vacant side and made an offer based on those numbers and our metrics that we want to hit. Our offer was accepted. A few days later, we collected the lease for the current tenant and came to find out that the rent is only $850, with a $150 pet fee (3 pets at $50 each). With that rent amount, we would not have made the offer that we did, or even offered on this property at all. At this point, we don't know how to proceed.

Are we at fault for not making sure that the rent amount is indeed accurate? Do you think this was a misleading tactic used by the seller, or is this a common way that rental income is reported? The market we are in is extremely hot for sellers, such that most duplexes have multiple offers at or above asking after only a day or two on the market, which makes it difficult to request additional information ahead of making an offer, such as the lease, yet remain competitive and timely. 

We have not yet made a decision to remain under contract with the seller or back out of the deal, so any input would be greatly appreciated.

Ryan

[Marcus Auerbach]

@Ryan Reynebeau don't panic. Most duplexes I see listed on the Milwaukee MLS list rents that are below fair market, often times significant. Why? The owner has typically lost interest in the property long before they decided to sell, they often coast on the last tenant for a few years and then put it on the market. Maybe 1 in ten duplexes listed rent for fair market.

In Milwaukee the rent often comes out to about a buck a square foot, depending on neighborhood and condition a bit more or less. So, is you are talking about a 2,200 SF duplex in an average area you will be fine. And by the way, in my experience most inherited tenants are trouble. They will often not respect you as much as the old owner. So, usually a good idea to turn the unit over, find your own tenant, sign your own lease, bring rent up to fair market.