If you are considering buying a Windsor property that was used as a rental by the seller, you should always proceed caution. A home that was formerly occupied by tenants may be a maintenance nightmare.
I suggest the following when considering these type of home sales:
1. Check out the neighbourhood:
Are the majority of properties in the surrounding area rentals as well? Your real estate agent may be able to tell you, or you can ask the neighbours. The problem with too many rentals is that it can fluctuate home prices. Also, neighbourhoods that have a high number of rentals can often look rundown. Be sure, before you consider making an offer, that the area is in a good location. This is especially important to determine if you are new to the community. Again, they don’t say “location, location, location,” is the number one rule in real estate for nothing.
Also, if the rental home you are looking at is the worst house on the block, with horrible curb appeal and simple design flaws, then ask for a better sales price. It never hurts to negotiate if a property isn’t moving quickly and the seller is motivated.
2. Tour without tenants.
It’s always a good idea to view a property without the tenants being present. If they are being kicked out by their landlord, chances are, they are not happy and may tell you issues they have had with the home. It’s always best to stay clear of these types of possible confrontations as the renters may exaggerate a minor issue or make up problems that don’t exist. And with these types of homes, buyers must have an open mind when touring rental properties because often, tenants don’t keep it in pristine condition.
What to look for? Holes in walls, ripped or torn carpeting, leaky faucets, appliances that don’t work and missing features.
3. Why is the owner selling?
A property owner may be very motivated to sell their property simply because they are tired of renting, want to downsize, burned out on late night phone calls and tenant demands or maybe the property needs repairs that cannot afford to make. The good news is that rental homes often sell for less than owner occupied homes. And when a seller is motivated, a buyer can get a very good deal.
Good deal or not, a buyer must always get a home inspection. Buying a home “as is” particularly one that has been a rental property, is always risky and can literally drain your finances if you discover costly repairs after you moved in. Why take the chance? It’s much better to sleep well at night as a home inspection can really give you peace of mind.
1. Ask your real estate agent for a list of referrals for home inspectors. Keep in mind that a report should be lengthy, up to at least 30 pages. Any inspector that goes in and out of a house in under an hour or two and provides you with a handful of papers is not what you want.
2. When meeting an inspector for the first time, ask to see a sample report so you know exactly what to expect.
3. Ask for a list of references from inspectors previous clients. See if former customers were satisfied with the home inspectors work, and if any issues or oversights occurred.
4. Be present during the inspection. This is an excellent time to ask a unbiased expert about repairs, the costs and the overall condition of the property. Also, an inspector can show you where things such as where the circuit breaker or main water valves are.
Making an offer:
As I mentioned above, buying a home that was used as rental property can be a good deal, especially if repairs and updating are needed. Often times, the owner of the rental simply has grown tired of being a landlord and ready to move on. Especially if you are a first time home buyer, this may very well be the sort of property that is highly desirable from a cost standpoint. Chances are, negotiations may go back and forth, especially if repairs are an issue. Make sure you have hired a professional real estate agent that can handle these often difficult and touchy discussions and can offer suggestions should the negotiations stall.
What will need to be reviewed and agreed upon by both parties regarding repairs is: Who will make them? Who will pay for them?
If a seller makes the repairs before closing, make sure the inspector goes back for a recheck once repairs are said to be complete. Repairs made after closing mean that the seller can give you a lump sum at closing to pay for repairs, or they drop the price of the home. Again, there are many options and the methods you use depends on the complexity of the repairs.