In your quest to find a rental property (or in some cases, more investment property units), the question will often arise as to whether it is best to purchase homes that are empty, or alternatively, ones that are already rented out.
The answer here is that it can depend on several key factors.
For example, on the positive side, you could end up saving yourself a considerable amount of time and money in terms of marketing the unit for rent, as you’ve already got someone living there. Because of this, it could also mean that you’ll have an immediate incoming cash flow – which in turn, can make paying the monthly mortgage payments much easier.
Yet, even with these benefits, there are also some items to consider here. One key factor is that the tenant (or tenants) who are currently residing in the property have not met your particular screening process.
The current tenant(s) is also not living there under your specific lease, which could end up causing problems. For instance, as the new owner of the property, you may not be able to modify the current tenant’s lease without their consent. This means that you may not raise the amount of their rent, and that you must honor any of the other agreements and /or clauses that are in the existing lease. (Typically, even if a property changes ownership, it will not void an existing lease – unless the property was foreclosed upon).
With that in mind, you could end up spending an inordinate amount of time just getting things up to speed. If this would require time that you don’t have – but the property otherwise seems like a good deal – then you may want to consider working with a property manager.
Doing so will turn over many of the tenant- and property maintenance-related details to someone else, but still allow you the ability to make a profit. For more information on working with a property manager in the Central Florida region, Contact Us.