Is your choice a vacant property? Or a tenanted property?

Is your choice a vacant property? Or a tenanted property?

 

When searching for property investments these are two choices that are always there. One investor may say that he would rather have an already tenanted property to avoid the leasing process, and another may want to try to lease it out at a higher rental amount. Either property is a good choice but let us go over the merits and demerits of each type.

 

-Vacant Property-

Merits:

  • Usually cheaper than “already tenanted” property
  • Can renovate the unit to lease for higher rental
  • Can use the unit for personal use and decide to lease whenever
  • Can view the interior and other areas before purchase
  • Can decide the details for Tenant Agreement (no pets, etc)

Demerits:

  • Must figure out why it is vacant
  • Have to find tenant so no immediate income
  • Have to research surroundings to see if and how long it would take to get a tenant
  • If leased out during off-season it may take a long time to confirm a tenant

 

-Tenanted Property-

Merits:

  • Immediate income
  • Tenant period already exists with automatic renewal unless tenant moves out
  • Rental amount is usually based on market
  • Hassle free

Demerits:

  • Must retrieve tenant background from agent to understand what kind of tenant
  • It will be almost impossible to drive the tenant out
  • Could be a chance that the rental was based on “past market”
  • Cannot view the interior

 

Whether it is a vacant property that you could control, or an “owner change” property that produces immediate income, either choice would be a successful real estate investment with the right mindset. It is said though that the better choice for investment beginners would be the tenanted property to stay away from any hassles, and the intermediate choice would be the vacant property.

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