Getting a Hillsboro rental property with existing tenants may sound like an ideal situation. After all, the ability to skip renovating the rental home, advertising, and screening tenants is quite remarkable. But procuring a property that is presently leased includes some perks but also some struggles. To successfully purchase a property with existing tenants, it’s vital to first learn as much as possible about the process and what to avoid.
The instant cash flows and turnkey nature of buying a leased property could seem to be a smart choice for your next investment property. However, it’s significant 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. Even more so, do your due diligence to guarantee that leased property is a good investment.
One of the primary things you ought to look at when considering a leased property is the current lease agreement. Once you purchase a property occupied by tenants, you automatically inherit the lease agreement they signed with their former landlord. Because the lease is a binding contract, you will need to be comfortable living by the terms of that lease until it ends or comes up for renewal. In certain instances, the tenant may decide to terminate their lease upon the property’s sale, although this is not a common thing. In most cases, you need to know what prior agreements govern your new investment.
As well as examining the existing lease documents, you need to screen the current tenants carefully before purchasing the property. Treat the situation as if the tenants were making an application for the first time, running thorough background and credit checks on them and verifying their payment history and references. Besides, verify with the current owner or landlord that the tenant has paid a security deposit and that it is kept appropriately in a separate bank account.
Together with screening your tenants, it’s critical to do a thorough evaluation of the property as well. To get a full sense of the property’s current condition, you should check the house’s condition and yard in person. With tenants presently dwelling in the property, it’s important to know how responsible they are about keeping the property clean and maintained. Furthermore, remember to ask the current owner about any current or past insurance claims, especially if they are tenant-caused. Numerous insurance claims might make it tougher for you to ensure the property after the sale.
If all looks perfect, you may have got a great, tenant-occupied rental property. But regardless of whether your new Hillsboro investment already has tenants or not, you’ll need to be ready to make and sustain the property in habitable condition, confirm if 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 already living there, once the sale is completed, you are fully responsible for managing and maintaining the property from that point on.
Property management can be a very complicated job, particularly if you are doing it yourself. Instead, why not assign the day-to-day tasks over to professionals? For further details about the property management services in Hillsboro, contact us today or call us at 971-270-2600.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
