Hey Mario, We're doing several rehab loans right now...mainly in Pinellas...on Hurricane Milton-damaged homes.

The Landlord will verify that the rental is empty of all personal belongings and trash and that there is no damage beyond ordinary wear and tear. 

I had a similar idea (having one of the mortgage brokers I know underwrite any prospective buyers.

The tenant deposit covers DAMAGES, not wear and tear. 90% of tenants want a decent place to live, market rent, and a good tenant landlord relationship, and pay rent on time.  

Personally I would pass but if you go forward I would do a lot of research on the group you are renting to and get a very large security deposit to cover damage. 

@Ming HuangRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

@David YoungRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

My recollection is (and insurance experts on BP can correct me if my memory is wrong), but most insurers will only pay "replacement cost"  policy limits, if you actually replace the damaged property.

The law does NOT apply to landlords:With less then 5 rental unitsThat live in one unit of a duplex and rent out the other unitThat rent out rooms in the home they occupySo, landlords can no longer state in their rental ads, "Section 8 not accepted".The reverse is also true, "Section 8 only", cannot be used.We've always recommended screening S8 tenants the same way as cash-paying tenants.Landlords waiving application fees and/or security deposits only for S8 prospects may also be violating Fair Housing.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.Both Property Classand Tenant Class affect what type of contractors, handymen and property management companies will work on a property.If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?