Handy Tips When Negotiating to Buy a Former Rental Property

It's quite understandable that a lot of people specifically look for former rental properties to purchase as their own home. Well-maintained properties in a good neighborhood can be quite a boon especially for a first time buyer because a lot of times, these kinds of properties are priced below market value, and sellers are usually very motivated to sell.

Sellers may be motivated to sell because at times, small landlords who bought the home as an investment run into problems with tenants defaulting in their rent payments. Say for example you're looking into Long Beach Island homes for sale and came across a property that you want to buy and use as an investment (a rental home), you may have initially planned that the rent income would help pay for part (if not the whole) of the mortgage. However, during seasons where not many people are renting, or if you happen to get tenants that pay their rent late, your mortgage would still be due. Unless you have huge funding for the times when you can't shore up the deficit with your own money, it could be a huge financial risk on your part.

Some landlords who are highly motivated to sell may not have anticipated that being a landlord entails a lot of calls, demands, and complaints from tenants. When you just live in the house that you bought, you can wait until you have enough funds until you get something fixed. For landlords, however, they can get a lot of problems if they don't fix the issues that their tenants reported in a timely manner. Aside from it being a little stressful, it's also quite financially burdensome if you're not prepared for it.

Before making an offer on former rental properties, it's important to keep a few things in mind. Most home searching principles apply here, aside from a few other adjustments. Here are a few things to get you started:

1. Schedule a walk through when the tenants are not home. - Most sellers will agree with a lockbox policy where you can really schedule a visit while tenants are not in, some tenants are just resistant to it. Some tenants will discourage you from inspecting the cabinetry, which is an important part of deciding about negotiations. Some will even discourage you from buying the house, especially if they don't want to move.

2. Take note of all things that needs immediate repairs. - Sometimes you'll see something obvious that needs to be fixed (like a hole in the wall). Take note of these and bring it to the seller's attention so you can make adjustments to the price as you negotiate or whatever would be a good arrangement to deal with them.

3. Have the house thoroughly inspected. - At times the seller may not be able to disclose important issues with the home because they don't live there. It's important to have the house thoroughly inspected in order to know if there are any serious issues you should know about.

Loretta Lange is a freelance writer who specializes in writing content about real estate, business and investment. Check out great Long Beach Island homes for sale and Long Beach Island real estate listings.