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Updated almost 9 years ago, 01/20/2016
Tenants
I'm looking to invest in multi family homes and in my area I have two houses I'm looking into. One has tenants already and one does not. I'm asking for advice on should I invest in the one that does have tenants already or is it better to start without so I can go by my own lease?
This is truly a pretty difficult question to answer. There are pros and cons all the way around.
You may be able to review the leases that the current tenants are using, if you speak to the owners about it. If the leases are strong and the tenants are stable, it might be nice to keep them.
On the other hand, if the tenants are an issue, there is a chance that the current owner wouldn't reveal to you the full extent of the issue.
If you're a brand new investor, it could be hard to select a quality tenant unless you adequately prepare yourself for the task.
Are there any more details available, or are you flying dark?
I know that some of the tenants have been there for a couple of years and one tenant just moved in recently. This multi family house is a 4 plex. There is a unit avaliable for me to move into, since it will be my first investment house. I'm just concerned that since I will be living in the building would it be better for me to hand pick the tenants or just go along with tenants that already live there. The other property is a triplex that is empty. The owner of the 4 plex says it has good rental history.
It's an excellent question to ask, but, it depends on your preference and risk level.
I have charted a course wherein all the properties bought are acquired with tenants. I specifically seek this model of operation....and it works.
It's a good feeling to hit the ground running with partial income received when closing is after the 1st of month and security deposits handed over at the closing, rather than spending a month or more looking for a new tenant.
In this model I have only had to evict one tenant so far and will continue to pursue my goal of other property additions with this model of acquiring the property with a tenant.
I drive my RE agent crazy with it, but, will not change.
Good luck with your search and decision either way.
Thank you! I think I'm gonna go with the tenants! Have a good day!
I don't know about you seasoned investors, but my plan for my first unit is to implement the website https://www.rentalutions.com/ Your first rental is completely free, so it's a nice way to test them out. Prospective tenants fill out all the info through their site and they do a complete background check for you. You can also collect rent online free for both you and the tenant. And it keeps track of maintenance requests and financials. it also gives you legal forms to use for your new tenants. Sounds like a win win to me. At least for starting off since it's completely free for that first rental.
Originally posted by @James Bynum:
I don't know about you seasoned investors, but my plan for my first unit is to implement the website https://www.rentalutions.com/ Your first rental is completely free, so it's a nice way to test them out. Prospective tenants fill out all the info through their site and they do a complete background check for you. You can also collect rent online free for both you and the tenant. And it keeps track of maintenance requests and financials. it also gives you legal forms to use for your new tenants. Sounds like a win win to me. At least for starting off since it's completely free for that first rental.
Thanks for the website, I've been researching for a solution and this one did not come up anywhere else.
if they are good reliable tenants then don't fix what is not broken.
Either way, the goal is to have good paying tenants and if they are there when you buy the place-great!
I have the similar situation but I am looking for a duplex instead.
Jeremy mentioned we should review the current lease. It makes sense to me. I am wondering what other information I should ask from the owner regarding existing tenants? Is it too much to ask for bank statements to show that current tenants was paying their rents on time?
Samson
I recently answered this very question about buying property with tenants. Try to check my recent posts or research this issue here on BP
@Douglas Snook, Thank you very much! I will search the similar issues on BP.
Originally posted by @Cori Barnes:
I'm looking to invest in multi family homes and in my area I have two houses I'm looking into. One has tenants already and one does not. I'm asking for advice on should I invest in the one that does have tenants already or is it better to start without so I can go by my own lease?
Hello Cori,
That is a very difficult situation! There are many factors that could go into this decision. Are both of the houses equal if every single aspect? To be honest, I would not be concerned about which one has tenants and which one doesn't. I would view the tenants as just a bonus.
Are they good tenants? No problems you know of? Planning on staying a long time?
Sometimes it is easier to get the home vacant so you can issue a lease on your term. If you go with the home with tenants you will have to honor their lease until it ends. With a vacant home you can draft the lease however you want. Also, you can screen the tenant with your system and make sure they are up to your standards. If you get the home with the tenants, you run the risk of them not being that kind of tenant you want in your home.
But there is always the benefit of already having it leased of course!
Please let me know if you have any questions.