Buying tenants

For rent 2

For rent 2If you are thinking about buying a house that is currently rented out to tenants, there are a few things you need to know.

First, if you are going to be keeping the tenants, you will want to see their rental agreements while the offer is still conditional. You do not want to become the owner, or even have the deal go firm, and then find out that they are paying well below market rent. You will also have to be upfront with your bank, because if you tell the bank that you will be living there and then get tenants, you could be in serious trouble. And if you tell your lawyer the truth, you will get sent to another lawyer and the bank will know that something is up.

Second, if you want to live there, be aware that the tenants still have the right to stay until the end of their term of tenancy. If they are month-to-month, then all you need to do is have a closing of more than 60 days. If they signed a lease for two years, and are only through one year, then they have to be allowed to stay the remainder of the term. You can always negotiate with them about leaving early – which usually involves paying them – but they have the right to stay.

If the house you are buying has tenants, think before you buy.