Considering Property with Existing Tenant

[John Matthews]

Hi BP,

There's a few properties that I'm considering that already have tenants in place, but have held off on doing anything about them because I didn't want to inherit a bad tenant. That said, how do you determine if a tenant is good or bad before getting the property under contract?  

[Michael Noto]

@John Matthews  Typically in the screening phase for a vacant unit the prospective tenant would pay for the check, but given this particular situation it would probably be best for you to do that as well.

I am always working with investors up here in CT and as their realtor I stress the importance of when inheriting tenants they should be doing due diligence on them just like they are on the actual property itself.  Make sure to get copies of the lease and verify the tenants payment history along with the normal credit, criminal, eviction checks that should be standard in any applicant pre-screening process.

As far as the tenant being "good or bad" that can mean many things.  Typically here in Connecticut most landlords will look that you have no felonies, no evictions, and that the applicants combined take home in income 3x the monthly rent minimum.  That income requirement is for properties that do not include heat and hot water in the rent.