Previous Owners of Your Rental

[Satyam Mistry]

Hello, I am interested to know how much consideration is put on how many times a property has changed owners and if it matters much to you if current owners are also using property as a rental? 

This question is more for SFR and 2-4 unit properties (of course these small multi family are rentals, but owner may also be occupying).

I have generally had success with properties that have had the same owner for decades that show good signs of maintenance and care. I generally prefer this over a property that has changed hands many times over say 10 years, but am curious to know how much other investors consider this factor. I have waived inspections on recent properties I have purchased and have just done a walk through with a trusted agent/investor as the market has been so hot that good properties under $200k are usually gone in 24-48 hours. If you want an inspection your price will generally be quite a bit higher than other offers for the sellers to consider. Hence the reason I do place some thought on how many times the property has changed hands and over what period of time. Thank you for your input.

[Lynnette E.]

I bought a house that was a custom build from foreclosure for my personal residence. This was back in the day and there was not a lot of information available at that time. It was a HUD foreclosure.

Later with INTERNET and records placed on line I found out that it was repoed by HUD 3 times. HUD had owned the house an much as any other entity.

I knew why too!  The house is in the mountains and typically there is a parking deck attached from the street to the house on down slope houses.  This house's parking deck was built as a part of the house, not as a separate attached deck.  Which is no longer allowed because of the issues it creates.  When the parking deck, which is just a wooden deck of non-pressure treated wood starts to rot the main beams in the house are rotting too as its one piece of wood from the street into the house.  The rotten wood brought melted snow and rain water along the grooves of the wood into the house where it created a nice waterfall in the hallway of the middle floor.   And caused a shaky wobbly feel to the floor of the top level, which was even with the street.  (House built into the side of a down slope mountain.)

My helpful neighbors told me that all I had to do was what everyone else does--put a 50 gallon trash can on wheels under the ceiling hole and just empty it in the bath tub down the hall after snow melt or rain events....HMMM nope, I got the permits to cut the parking deck from the house, replace rotten wood in the house and most of the deck and stopped the waterfall.  Fixed the shaky feeling too by sistering wood to the cut half rotten wood in the house.

All the owners since it was constructed could not figure out how to fix it so just let it go back to the bank after about 2 years of trying.

So, yes if a house has turned over a lot I expect a problem.

[Pat L.]

We see that locally with some homes built by a certain builder about 15-20 years ago. They change hands a lot due to poor construction & constant maintenance problems. In fact we noticed that in one sub-division nearby most of the homes had their roofing tile & some sheeting replaced within 12 years of the build date. 

Another big issue up here is unresolved basement leaking/moisture problems. We had one property built in '87 (a model home at the time), where the basement slab poor was so thin it constantly seeped moisture because the hydrostatic pressure beneath it. 

[Michael Noto]

@Satyam Mistry If you have had success buying a certain type of property and they are somewhat readily available to buy then keep continuing with that strategy.