When you are interested in buying an apartment as part of a rental real estate investment, especially when it comes to a small space, you may sometimes be offered the opportunity to purchase an already rented apartment, meaning that a tenant will already be living there when you become the owner. Is it a good idea?
The advantages of buying a property that is already rented.
A selling price generally lower
As long as you do not have the freedom to use the apartment as you wish, it is common to consider that a property that is already rented will be sold for less. For rental investment or if you are looking to buy a primary residence in which you do not need to move in immediately, this can represent an opportunity to buy the property cheaper per square meter.
Immediate recovery of rents
From the first day after the signing of the sales deed, you will begin to receive the rents. This can present an opportunity to accumulate cash flow, especially if you were able to negotiate a deferred repayment with your bank (that is, you only start repaying the principal of your loan after a few months - or even years - after the acquisition).
A predetermined rent, increased visibility on your income
Having a tenant already in place means you can know in advance a reasonable rental price for this property. This has 2 advantages. First, you can make your calculations with certainty. You know that, in principle, the state of the market allows you to achieve this level of income. Secondly, this demonstrates to your bank that this property is rentable and under what income conditions, facilitating the loan application process.
Less work
If you buy this property to make it a rental investment, you will have to start with certain essential steps. Determining rent, searching for a tenant, signing a lease, conducting an entry inventory, or even renovation work… You will spare yourself a number of sometimes burdensome and/or tedious operational tasks.
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