When there's tenants already occupying the property, there's often times different leases that were signed among the tenants.Additionally, renting by room usually sees higher tenant turnover which in turn causes more work for the PM.Other challenges to consider:- Disputes/conflicts among tenants (different personalities if a tenant doesn't know the others prior)- Occupancy limits- Splitting utilities (what if someone uses more water?)

Hey what are you going to do with that lot, or you know it is landlocked, or you know it is unbuildable, or you know that is under water, or whatever? 

Can't include furnace, hot water tank, central ac and some other built-in appliances - check your local ordinances.

Purchase price: $242,500 Cash invested: $49,000 This is an older house, built well on concrete block, that is next door to multi-million dollar houses on the water.

Get the easy stuff first - rent roll and lease end dates, any bills the landlord pays - common area maintenance, maybe water, sewer, taxes, and insurance.

Have a salon with a water heater that was installed around three months ago, and the tenant has complained that it's having issues heating the water; I suspect it may be an electrical issue with the system. 

The main issue with rental basement is water if it has water issue usually it is a simple fix .Clean gutters ,discharge gutter  water away 10" away from foundation, make sure you foundation soil is slopped away from it .If you need to buy soil get a clay mix .Cut back any tree too close to the foundation look at the drip line that's how far the limbs are out from the tree .If all that is done still has water buy a sump pump  carry the water to day light away from foundation 10" to 15" .

Water services.

This is my first extensively water damaged home that I may purchase.

The house has a new roof, but HVAC and water heater replacement might be needed in the next few years.Also, mortgage rates are currently around 7%.