Are you thinking about buying a tenant-occupied property? There are a few key things to consider before making your purchase. Pros can include the potential for a lower purchase price, as well as the possibility of immediate rental income. On the other hand, cons can include the need for additional due diligence to assess the quality of the tenancy agreement and make sure that the current occupants are able and willing to pay rent on time and maintain the property in good condition.
If you’re interested in learning more about the pros and cons of buying tenant-occupied properties, read on for more information.
Pros of buying tenant-occupied properties
One of the main pros of buying tenant-occupied properties is the potential for a lower purchase price. Since the property is already occupied, the seller may be more willing to negotiate on price. Additionally, you may be able to get a better deal if the current occupants are interested in staying on as tenants after the sale.
Another pro of buying tenant-occupied properties is the possibility of immediate rental income. This can be a great way to offset some of the costs of ownership, such as mortgage payments, insurance, and repairs. Additionally, you may be able to increase the rent over time if the market conditions are favorable.
Cons of buying tenant-occupied properties
One of the main cons of buying tenant-occupied properties is the need for additional due diligence. You’ll need to carefully review the tenancy agreement to make sure that it’s fair and favorable to you as the new owner. Additionally, you’ll want to assess the current occupants to make sure they’re able and willing to pay rent on time and maintain the property in good condition.
Another potential con of buying tenant-occupied properties is the possibility of vacancy. If the current occupants move out, you may be left with a vacant unit that isn’t generating any rental income. This can be a real financial burden if you’re not prepared for it.
Overall, there are both pros and cons to buying tenant-occupied properties. It’s important to do your research and weigh all of the factors before making a decision. If you have any questions, be sure to consult with a real estate professional.