Whether you are a seasoned pro or an aspiring real estate investor, you must have purchased one or more properties in your life. All investors have at least gone through this experience by buying their own home. This experience remains their frame of reference for their future purchases. There is no need to worry as the process of buying remains very similar whether you are buying a home for your own use or to add a rental income property to your portfolio. You do the same things over and again like negotiating with the broker, inspecting the property, singing the agreement, and of course closing the deal. The only difference between buying your own home and a property for rental income is the way you deal and interact with the existing tenants.
As an investor, you will come across multifamily apartment buildings and duplexes that are occupied by tenants. It often becomes difficult for the owner and his agent to show the property to a potential buyer with tenants living inside. An owner just cannot knock the doors of one of his tenants at any time for the sake of showing the property to a prospective buyer. It is considered as invasion of the privacy of the tenant and they may take offense to this act of the landlord. There are compromises form the both side in such cases and sometimes the seller makes excuses while the buyer takes his decision without taking a close look at all the units of the rental property. However, tenants living inside a property need not be a problem for either the owner or the buyer.
Dilemma of the owners
There are many instances where owners do not inform their tenants that they have put their property on the market. They do not place For Sign boards inside or outside their properties as they are afraid of the reaction of their tenants. They know that some of their tenants will not like the idea of change in ownership. Some tenants start to think along the lines of moving out as they do not know if their lease agreements will remain the same or they will have to pay higher monthly rents.
Be sensitive to the situation of the owner
If you are a buyer, it should be your endeavor to not disturb the tenants living inside the property whenever you pay a visit to see the property from inside. Take prior appointment with the broker or the seller to make sure that tenants are not taken aback seeing you in the premises. It is natural for the seller’s agent to take you to a unit of the property that is lying vacant. You should understand that this is done deliberately to avoid any awkward encounter with a tenant. You are naturally curious to take a close look at other units, but you should resist the temptation of barging in a unit occupied by a tenant. By doing so, you can not only offend the tenant but also the owner of the property.
You must resign to the fact that you will not get to see all parts of the property that is inhabited by tenants. You should be glad that you are buying a property with many tenants living inside. Be prepared to make an offer for the property without getting a chance to see all the units of the property. There may be a contingency of prior inspection of all the units of the property in your contract but the agent and the owner will allow you such an inspection only after they are convinced that you are a genuine buyer and you will close the deal as per the terms of the contract. Wait for the time when this contract has been signed. The owner will himself give you permission to look at all the units of the property.
Property Management Service Areas