Purchasing an investment property with existing tenants might seem like fluky real estate investment upon initial consideration, especially when you decide to purchase a house in Sacramento. After all, some of the real estate investors would go for screening their tenants rather than commit to a pre-existing lease agreement. Having stated that, purchasing a property with a tenant in place does offer some advantages, so as the disadvantages. In this article, we will tackle-up the pros and cons of buying a house with tenants and will help you decide if this investment is worth your money and effort.
Before buying an investment property with a tenant, you must bear in mind of what owning these real estate properties entails. There are various guidelines and obligations that you must be aware of. It’s a bit of crucial, but like what we have said these pros and cons can help you to decide if you will push through this process of purchasing an investment property.
PROS AND CONS OF BUYING AN INVESTMENT PROPERTY WITH A TENANT:
- PROS- YOU CAN EASILY GET YOUR IMMEDIATE RENTAL INCOME; One of the benefits of purchasing a rental property with tenants for real estate investment is the reality that it generates immediate rental income. Especially buying a pro[erty here at Sacramento, you will never get a zero profit. The good thing here is that you won’t have to wait months to find tenants and you might even end up with extra income after covering-up mortgage payments and other expenses.
- PROS- THE PROPERTY HAS ALREADY MEET ALL THE LEGAL REQUISITES; This is another perk of buying a house with an existing tenant. As you surely know, an investment property needs to appease several requisites before it is ready to rent out. This includes various health and safety requirements that vary from state to state. Purchasing a house with existing tenants means that all these requirements are likely in place.
- PROS- IT’S NOT NECESSARY TO MAKE ANY EXTRA INVESTMENT; A major factor to be considered in buying a house with the tenant is the fact that no extra investment is needed. You don’t need to spend a lot of money on refurbishing the house as the property is already well-furnished and rented-out. This is very ideal for real estate investors who have a tight budget.
- CONS- SOME LEGAL RISKS MAY ARISE WITH THIS INVESTMENT; One of the ventures that you may encounter in buying a house with tenants is the probability that the property is not in compliance with certain laws. Some property owners don’t concede by the legal requisites while others are illegally unmitigated the rent out the property. In both cases, having an intact solution will always come from the current property owner. This can result in a long legal process of fixing it as well as heavy fines.
- CONS- REMOVING OUT THE TENANTS CAN BE A DIFFICULT PROCESS; Removing a tenant from the premises is not easy and it will take a month or so to do it. This is bounded by the fact that some jurisdictions lean towards the tenants in these cases. Seeking the help of professional property management will help calm these tasks, but the process can still be stressful.