Is it better to purchase units with tenants occupying or vacant ?

[Jackson Andrews]

What are all the pros and cons to having tenants occupying property vs vacant units ??

[Natalie Schanne]

@Jackson Andrews - Depends on your goals. There are 5 types of properties. A) Nice properties in good condition with market rate tenants “turnkey” paying on time. B) Fixer upper properties with below market rate tenants paying on time. C) Properties with problem tenants / not paying on time. D) vacant property that’s fixed up and rent ready E) Vacant property that needs to be rehabbed before renting.

There are more opportunities to get a cheap / value add deal with B, C, and E type properties. If you take on a problem tenant, you may get a price discount worth the hassle or not. Usually these landlords are motivated. A and B landlords aren’t usually very motivated and D owners can sell to other homeowners or rent it out. I tend to buy E / vacant foreclosures or estate sales the most, but C properties with tired landlords can be really motivated sellers and “off market” so others aren’t competing for the deal.