Buying a building with tenants
Summary
Buying a tenant-occupied property in Chicago requires obtaining the leases, honoring the lease terms, and considering the rental income. It is important to vet the tenants and inspect the property before making any decisions. House hacking may require at least one unit to be available for occupancy.
Highlights
💡 Buying a building with tenants can have advantages.
💡 Obtain the leases and honor their terms.
💡 Consider the rental income in your calculations.
💡 Eviction may be necessary if tenants don’t pay.
💡 Vetting tenants and inspecting the property is crucial.
💡 Lenders may require proof of occupancy for house hacking.
💡 Negotiating rent increase or non-renewal may be possible.
Key Insights
💡 Buying a tenant-occupied property can be a good option as it provides immediate rental income and avoids the hassle of finding tenants.
💡 It is essential to review the leases during the attorney review process to understand the terms and obligations.
💡 The length of the lease determines when a tenant can be vacated or have their rent increased.
💡 Vetting tenants by inspecting the property and asking questions can provide insights into their behavior and satisfaction with the current landlord.
💡 Lenders typically require proof that the buyer will occupy one of the units in a house hacking scenario.
💡 Non-renewal agreements and cash for keys can be used to vacate tenants, but they may not always be successful.
💡 Understanding the rental amounts, lease terms, and condition of the property is crucial for making informed decisions and calculating profitability.