There are loads of paybacks to purchasing an investment property with current tenants. One will start making rental proceeds from the settlement date of the house, and need not bear the costs of marketing the property to tenants – not to mention you can escape the aggravation of looking for a new property manager.
But buying a house that comes with its own tenants can also have its disadvantages.
Your responsibilities towards your tenants:In case the occupants have been there for an extensive period and the house is in decent condition, you will be quite sure that the occupants have had a good rapport with their landlord. However what if you’re not content with the occupants of the house you’ve bought?
The first and foremost significant thing to make a note of leases; check for the number of leases that are not voided when a property is sold. Except there is a distinct clause in a lease that talks about a loan (which is rare), you are obligated to honor the existing tenancy contract when you buy a property.
So if the current tenant is on a lease you must honour its terms. That means not breach ing the lease, or else giving reasonable notice period or reason in case you end the contract. If you’re not happy with your occupants since they’re delayed the rent or have violated the terms of their agreement, for instance, you simply have to provide them with 14 days’ notice to vacate.
You would be able, in most situations, to terminate a fixed term tenancy prematurely if you have a printed contract from the occupants.
But then what if the renters haven’t dishonored the terms of their lease?
Possibly you plan to dwell in the home. In that instance, ensure that can fix your move in date soon after the lease period is completed.
But you must remember, even when a contract is terminating, you need to give the occupants suitable notice that you do not propose to renew their agreement.