This Article Is About Buying A House With Tenants Who Are Still Occupants
Buying A House With Tenants Who Are Still Occupants happens if you are buying a home from a real estate investor.
- It is very common to have tenants on a home you are purchasing
- There can be benefits when buying a house with tenants if you plan on living in the home
- If you are a real estate investor or are not in a hurry to move in after you close, you can benefit from collecting rent
- The housing market is booming
- There is more demand for homes than an inventory of housing
- During a hot housing market, buyers cannot play hardball and demand the home seller to evict or buy out the lease of the tenant, or else there is no deal
- The housing market is booming even with the coronavirus pandemic
- There are many homebuyers willing to purchase a home with existing tenants and deal with the tenant issue after they close
- Buying a house with tenants in common when homebuyers are purchasing rental properties
- Gustan Cho Associates are experts in helping home buyers in buying a house with tenants
Risks And Rewards In Buying A House With Tenants Who Are Still Occupants
The housing market is booming despite the coronavirus outbreak.
- Housing demand is higher than inventory
- Many homebuyers do not have a choice when buying a home with tenants on a lease
- Homebuyers are just grateful they can buy a home with such a short supply of housing inventory
- Buying a house with tenants is great if you are a real estate investor buying rental properties
Jammi Cash is a senior vice president at Gustan Cho Associates. Jammi is a residential and commercial loan officer at Gustan Cho Associates. Jammi is also a real estate investor.
In this blog, we will be discussing things you need to know when purchasing an investment home that is occupied by a tenant.
Primary Owner-Occupant Resident Or Investment Home
Homebuyers purchase a property with existing tenants who are either real estate investors who are willing to keep the tenants as renters or those who intend in evicting the tenants and live in the home.
- Just because someone has purchase a home with tenants, it does not make the existing lease agreement null and void
- Tenant leases are tied to the property itself
- The new homeowner is legally bound to the existing lease agreement until the lease expires
- The new homeowner needs to abide by the term of the existing lease
- They cannot increase the rent, modify clauses on the lease, or decide to terminate the lease due to new ownership
- The lease agreement should be carefully reviewed prior to signing the real estate purchase contract
You need to make sure you are familiar with tenants’ rights in your city, county, and state if you decide to do something drastic like terminating the lease.
Buying A House With Tenants That You Intend In Occupying As A Primary Residence
Try to avoid buying a house with tenants that are not paying rent or squatters. Each municipality has its own code and laws when it comes to evictions. Some counties and states have tough eviction laws and favor not paying tenants versus landlords. Even for real estate investors, it is better to buy a vacant property and get your own tenants in than a property with tenants who you do not know their backgrounds. If you are intending in living on the home you are buying with tenants, see if you can buy out the tenants. You can offer the existing tenant cash for them to break the lease earlier than the expiration date. Worst-case scenario, you would need to wait until the end of the lease term before being able to move in.
