Buying a Rental Home – Wise Decision or Not?

Buying a rental home that was previously occupied by tenants can be a really good deal, or it can be the worst deal ever. Before moving, you need to keep a few things in mind.

Buying a Rental Home

by NNECAPA

Check the condition of the home carefully

Investing your money in a rental home is a big thing and you need to check the condition carefully before buying. Some rental homes are badly maintained while others aren’t. Some tenants also make smaller changes like freshly painting the house, adding new appliances, landscaping the garden, etc. Most renters consider this property their home and take care of it. If a house has been used as a rental for many years, it may have defects. If the home has been used by multiple tenants, problems are bound to occur. Thus, one should check these things out before deciding to invest.

Tour the rental home when it’s not occupied

If you are planning to buy a rental home, you need to tour it when the tenants are not present. You need to check for holes in the walls, floor damage, appliances, rotten seals, heating problems, etc. Make sure you check the indoor as well as the outdoor areas properly before finalizing the deal. You should easily be able to detect the way the house and property have been maintained.

Check the neighborhood

The neighborhood is very important. You need to check it before you plan on living there. Check if the homes are rented singly or if they are multi-rentals. You also need to check on the common facilities you have to use like the parking area, garages, street lights, parks, etc. Comparing the rental home with the other neighborhood homes will help in deciding whether to invest or not.

For how long is the rental home unoccupied?

If the rental home you are wishing to buy is unoccupied, you need to figure out how long it has been in that condition. Learn the reason behind it and search out facts. Homes are usually left unoccupied due to major problems. Unoccupied homes are not maintained and are bound to have broken pipes, pest damage, leaky roofs, etc. Before buying the unoccupied rental home, you need to inspect it properly.

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This entry was posted in Buying a Home and tagged , .

Comments

  • Chris Rosprim says:

    Apr 28, 2014 at 1:37 pm

    Sale of most homes requires the seller to provide a seller disclosure. Purchase of any home should include inspection by a licensed (where required) home inspector to take a look at any and all physical aspects of any property – whether owner occupied, tenant occupied or vacant home or foreclosure.

    Reply

  • Johnny says:

    Apr 29, 2014 at 10:34 am

    “Buying a rental home that was previously occupied by tenants can be a really good deal, or it can be the worst deal ever” (Your quote)

    That can be said for owner occupied homes as well and I find very little distinction between the two. As long as the Buyer does their due diligence then the risks are the same for either purchase. I list a lot of homes that are tenant occupied and they tend to take longer to get a contract in general if occupied. In addition the seller tends to lose some price points. One must realize that the tenant has NO vested interest in the sell of the home.and is annoyed by having strangers enter their living space.

    As I tell every seller, the best scenario in the market I work, is for the home to be vacant, professionally cleaned, painted, staged and all necessary repairs completed prior to marketing it. That allows for a higher price point on the sale of the property. We do not live in an ideal world and we make adjustments to accommodate the needs of the sellers.

    In summary, the buyer needs to do his or her due diligence in any purchase to reduce the risks. Having selected an experienced agent that is more of a real estate practitioner than an agent certainly gets you started in the right direction

    Reply

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