Thinking about buying a rented property? It might seem like a great investment, but if you’re not careful, you could end up losing thousands, getting stuck with nightmare tenants, or even worse—a squatter who won’t leave for years and destroys your property!
By reading this article, you’ll be equipped with the 5 key things to consider when buying a rented property. Stick around till the end to hear my super secret tip about how to handle tenants after closing!
If we haven’t met before, my name is Lucy Hood and I’m a top producing Realtor that has bought, built, managed, and sold a great number of properties in my 8 years in the business. It’s my mission to bring you wealth and understanding through real estate, right here in the Smokies.
1. Know the Lease Terms**. When you buy a rented property, you inherit the existing lease. Make sure you review it carefully—especially the length of the lease, rent amount, and any special conditions.
2. Tenant Rights**. In Tennessee, you can give a tenant 30 days’ notice to move out, even if they haven’t breached the lease. However, if the tenant did something dangerous or threatening, you only need to give them 3 days to vacate. If the tenant hasn’t paid rent or has broken the lease, they may also be given a 30-day notice to leave. Be aware of these rules when taking on an occupied property.
3. Condition of the Property**. Keep in mind that tenants may not treat the property with the same care that a homeowner would. Schedule a thorough inspection to ensure you know what you’re getting into with any potential repairs or maintenance needs.
4. Rental Income, Cash Flow & Eviction Process**. Buying a rented property can be a smart investment, but you’ll want to confirm that the rental income is enough to cover your expenses. Don’t forget to account for things like property taxes, insurance, and maintenance costs. I have personally had to go through this process SEVERAL SEVERAL times for myself and for my clients. Each county is a little different, but Tennessee is one of the easiest states to kick out Tenants, in my opinion. Jefferson County is especially my favorite because the Judge doesn’t play with dead beats. If you’re in a situation with a tenant, please give me a call. I can probably help you out BIG TIME just with a quick chat.
Also, depending on how far behind a tenant is on rent, you can take steps fairly quickly to get them out. These rules vary by county, but in Jefferson and Sevier counties, all you need to do is give the tenant written, documented notice to catch up on rent within 14 days. If they don’t comply, you can subpoena them to court. Typically, you’ll get a court order requiring the tenant to pay and move out within 10 days of the court ruling.
5. My Super Secret Tip**: After closing, it’s a good idea to introduce yourself to the tenants and set clear expectations. A positive landlord-tenant relationship can go a long way in keeping the rental running smoothly!
Now that you know the basics of buying a rented property, you’re probably wondering about managing rental properties effectively.
Stay tuned for my next video, where I’ll dive into tips on how to be a successful landlord and make the most of your rental investments.
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