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Buying a rental property that is currently leased
Posted by BHTiger on 7/24/18 at 1:46 pm00
Looking at buying 2 condos that are currently leased. Anyone have any experience buying a rental property that is currently being leased? Does the lease convey? Initial deposit? Last months rent? Long term rental properties.
Thanks
Thanks
Yes, the lease conveys and so should the security deposit, but ultimately these things need to be spelled out in the offers and final sale contract.
Make sure your appraisal includes the additional 1007 form, and include in your contract that if the 1007 comes in less than what the current lease it, you reserve the right to back out of the deal.
Make sure your appraisal includes the additional 1007 form, and include in your contract that if the 1007 comes in less than what the current lease it, you reserve the right to back out of the deal.
re: Buying a rental property that is currently leasedPosted by slinger1317 on 7/24/18 at 1:53 pm to BHTiger
I purchased a duplex that was leased and had the sellers add the deposit amounts into the closing costs. I'm surprised they agreed to it, but it worked.
re: Buying a rental property that is currently leasedPosted by BHTiger on 7/24/18 at 3:26 pm to slinger1317
Thanks for the info.
re: Buying a rental property that is currently leasedPosted by StealthCalais11 on 7/24/18 at 3:56 pm to BHTiger
What's the status on buying a property as a primary residence but currently has a lease in place with tenants?
re: Buying a rental property that is currently leasedPosted by deeprig9 on 7/24/18 at 9:27 pm to StealthCalais11
quote:
What's the status on buying a property as a primary residence but currently has a lease in place with tenants?
You can't kick them out until the lease is up, and even then there is a notice period defined in the lease and/or state law. It's usually 60 days but that varies by lease and state. And sometimes county/parish or city.
So if you close the deal on March 1 and the lease ends March 30, don't think you are moving in on April 1.
re: Buying a rental property that is currently leasedPosted by lighter345 on 7/24/18 at 10:29 pm to deeprig9
Take the following with caution as I’m just trying to recall and not actually looking any of this up to confirm. However, I believe In Louisiana if the lease isn’t recorded and you aren’t specifically warranting to the seller that you are going to honor the existing leases I’m pretty sure you can kick out the tenants. Now I’m not sure on the process, meaning if it needs to be done through eviction proceedings or what. The lessees can actually recoup damages against the seller, not you. Again, I would look into this and you should be able to find the answer with some light googling. The state puts out a Landlord/Lessee right handbook every few years that probably has this scenario in it.
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re: Buying a rental property that is currently leasedPosted by LSUFanHouston on 7/25/18 at 12:19 am to BHTiger
Generally the new owner steps into the shoes of the current owner as far as any leases are concerned.
Security deposits are usually figured into the closing of the sale... so you won't typically get a seperate check or anything, but you will get a reduction in the amount of money that you have to bring to the table at closing, to account for the deposits.
Security deposits are usually figured into the closing of the sale... so you won't typically get a seperate check or anything, but you will get a reduction in the amount of money that you have to bring to the table at closing, to account for the deposits.
re: Buying a rental property that is currently leasedPosted by yellowhammer2098 on 7/25/18 at 9:50 am to BHTiger
Security deposits in most states are legally required to be kept in a separate account from any other money. At closing you should get a check for security deposits that need to be deposited into a separate bank account. Money due at closing should be affected by pro-rated rents (make sure you ask for this in offer), pro-rated taxes, etc. Lease should transfer with ownership. Usually, I'll try to get the tenant to sign a new lease after closing.
re: Buying a rental property that is currently leasedPosted by Rust Cohle on 7/26/18 at 7:51 am to BHTiger
Deposits are the tenants, and should be surrendered to buyer. Inherited tenants can be bad, and need to be “retrained”
Have you seen the lease? I bet they are just month to month.
Have you seen the lease? I bet they are just month to month.
re: Buying a rental property that is currently leasedPosted by bobaftt1212 on 7/26/18 at 8:08 am to Rust Cohle
I bought one property with tenants in it. They weren't great tenants so rent went way up when the lease expired.
re: Buying a rental property that is currently leasedPosted by BHTiger on 7/26/18 at 8:32 am to Rust Cohle
Actually both tenants have 15 months remaining.
re: Buying a rental property that is currently leasedPosted by lighter345 on 7/28/18 at 4:25 pm to BHTiger
So what did you do?
re: Buying a rental property that is currently leasedPosted by BHTiger on 7/29/18 at 11:59 am to lighter345
Going to purchase both. Last months rent and security deposit both both will be transferred at closing.
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