Obtaining an Arlington rental property with existing tenants may look like an ideal situation. Besides, the capability to skip renovating the rental home, advertising, and screening tenants sounds attractive. Yet, there are some advantages and some difficulties when it comes to buying a property that is already leased. To successfully purchase a property with existing tenants, it’s advisable to initially learn everything you can about the methodology and what to evade.
The instant cash flows and turnkey nature of buying a leased property may appear to be an ideal option for your next investment property. But it’s essential not to presume that just because a property is leased, it is in good condition or that the tenants are responsible and punctual with rent payments. Instead, do your due diligence to secure that the leased property is a good investment.
One of the primary things you must analyze when considering a leased property is the current lease agreement. When you obtain a property occupied by tenants, you automatically inherit the lease agreement they signed with their old landlord. As the lease is a binding contract, you will have to be comfortable living by the terms of that lease until it ends or comes up for renewal. In certain scenarios, the tenant has consented to terminate their lease upon the property’s sale, but that is not the usual case. For the most part, you need to know what prior agreements govern your new investment.
Along with examining the existing lease documents, it’s recommended to screen the current tenants carefully before obtaining the property. Treat the situation as if the tenants were applying for the first time, running thorough background and credit checks on them and verifying their payment history and references. Also, verify with the current owner or landlord that the tenant has paid a security deposit and that it is stored appropriately in a separate bank account.
In addition to screening your tenants, it’s ideal to do a thorough evaluation of the property as well. To get a full sense of the property’s current condition, it is necessary to see the house’s condition and yard in person. With tenants already occupying the property, it’s advisable to know how meticulous they are about keeping the property clean and maintained. Besides, don’t forget to ask the current owner about any current or past insurance claims, specifically if they are tenant-caused. Too many insurance claims might make it challenging for you to ensure the property after the sale.
If everything checks out, you may have found an excellent, tenant-occupied rental property. But even if your recent Arlington investment already has tenants or not, you’ll need to be prepared to keep and maintain the property in habitable condition, guarantee that the electrical and plumbing systems are safe and working correctly and that the structures are sound. While your new rental property may come with tenants residing there now, the moment the sale is executed, you are fully responsible for managing and maintaining the property from that point on.
Property management can be a very stressful responsibility, mainly if you are doing it yourself. Rather, why not turn the day-to-day tasks over to professionals? For more details about the property management services in Arlington, contact us today or call us at 817-502-3588.
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