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Are you considering purchasing a property currently occupied by a tenant? While this type of purchase offers advantages, it's important to take some precautions before diving in. Sale price, lease renewal, rental disputes...
If you're buying a property already occupied by a tenant, you have obligations to fulfill. One thing is certain: you won't be able to occupy the property directly, which isn't problematic for a rental investment. In reality, it all depends on the remaining term of the current lease at the time of the authentic deed's signature. Essentially, when the previous owner put the property up for sale, they had to notify the current tenant, who has a right of first refusal. In other words, the occupant has priority to buy the property. If the person isn't interested and wants to remain a tenant, you, as the new landlord-owner, must renew the lease for a minimum of 2 years if it would end less than 2 years after your purchase. If the lease ends more than 2 years after your purchase, you cannot shorten its duration. If you want to reclaim the property at the end of the lease, you must inform your tenant 6 months before the end of the lease for unfurnished rentals and 3 months before for furnished rentals.
Purchasing an apartment or house already occupied by someone has several advantages. First advantage, the sale price is often reduced compared to a vacant property. In other words, this gives you the opportunity to buy a property at a lower price than the market. The applied discount is not automatic and varies depending on the remaining duration of the lease (the longer it is, the greater the discount), the rent level compared to the market (the lower it is, the greater the discount), or the condition and characteristics of the property. For example, a studio apartment in perfect condition in a student city will benefit from a low or non-existent discount. Second advantage, if you become the owner of the property as part of a rental investment, you don't have to search for a new tenant and therefore benefit from immediate income after your purchase. An investment that avoids rental void periods, meaning the period when your property remains unoccupied after your purchase, and generally reassures banks, making them more likely to grant you a loan.
The main drawback of buying an already occupied property is that you cannot occupy the premises until the current tenant's lease is terminated. This can be problematic if you're buying the property to make it your primary residence. Furthermore, even if it doesn't pose a problem because you're buying this property for rental investment purposes, take the time to analyze the lease clauses before committing (rent amount, revision method, termination clause...). Indeed, as a new owner, you won't be able to modify them. Also, take the time to look into the occupant's profile by requesting rental receipts from the previous owner. This will allow you to ensure the regularity of rent payments. Avoid investing in an occupied property if you notice recurring payment incidents. To reassure yourself and avoid seller's intentional omissions, you can ask the notary to mention the absence of payment incidents and rental disputes (disputed charges, neighborhood disturbances...) in the deed of sale.
Source : edito.seloger.com
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