Tenant Occupied Rental Investment Property Questions

[Julian McClean]

Hello BP Community –

I’m new to BP and to Real Estate Investing so looking for some guidance from this amazingly informed group. I’m investigating my first potential purchase for a buy-and-hold rental property (which currently has a tenant in it through June 2021) and had a few questions:

1. Is it a good idea to pursue a property with a tenant currently in it (or is it better to find your own tenants)?

2. The property listing mentions the amount the tenant currently pays in rent. How and when would I verify that information is accurate?

3. When should I do my own tenant screening to ensure the incumbent is a quality tenant (prior to offer, during due diligence period or some other time)?

Thanks in advance for the insights!

Best,

Julian

[Michael Henry]

@Julian McClean Real estate investors buy properties every day that has tenants in them. It is very subjective if one might request to have the property vacant prior to closing. It is customary for the Seller to deliver the tenant information e.g. lease, application, and/or tenant ledger after acceptance of the Offer. With this information, you can proceed with your own due diligence and background check on the tenant. If you are worried that the tenant might be a bad tenant you will need to make the offer contingent upon a review of documents; usually 5 days. If it is a desirable property with multiple offers this type of contingency will hurt your chances of getting an accepted offer on a single-family or duplex. 

I hope this helps.