Inheriting Elderly Tenants

[John Kesner]

Hello BP, I'm in contract on a nice little rental house that has some great potential, there is just one catch. The existing tenants (very nice people) are an elderly couple (75+), on a fixed income, have a laundry list of health issues, and have a ton of stuff in the house, not hoarders but more stuff than 2 people should have. They are paying $850 and market rent should be $1000. My agent said the bring in $2200/mth but have no other debt or payments. They are stressed about having to move (it would stress me out facing packing all that stuff up) and willing to pay more to be able to stay. I feel we just screen them like new tenants and if references check out I'm leaning towards continuing with them, although they are below the 3x rent income requirement. The property would probably need $3-5k in carpet and paint to ready for new renters so it would he great to have a good built in tenant for a while. Anyone have a situation like this go bad that can share some things to watch out for?? Thanks

[James DeRoest]

I'll get jumped on by the hard nosed landlords, but if you're $150 down and if you get them out of the property, it'll be down for two months and it'll cost you $5k to redo things. So you're down 2x850 +5000=$6700.

Which will now take you $6700/$150=45 months. Not to mention that 45 months is above most tenancy lengths, so expect one turn around which will be another $1000 lost.

So, 45-51 months to get yourself ahead again.

They suddenly don't seem like such a bad deal now.