Getting into the real estate industry is something a lot of people wish to do. It can be a very profitable business venture if done correctly. However, there are many things to consider before jumping into this industry — one of which is whether or not to buy an old rental property.
On the one hand, buying an old rental property has its perks. For starters, the property will likely come with pre-existing tenants. Additionally, older properties are often located in more desirable areas as they would have been established long before newer developments popped up.
However, there are also some drawbacks to taking on an old rental property. One such downside is that these properties usually require more repairs and maintenance than newer ones. This can be costly, and it’s important to factor in these potential expenses before making an offer on the property. You will also be held responsible for any damage that previous tenants may have caused.
Suppose you’re thinking of buying a property that was once a rental. In that case, there are several things you need to weigh before making a decision. So how do you decide if buying an old rental property is right for you?
Pros of buying an old rental property
As mentioned, an old rental property can come with pre-existing tenants. This is great news for first-time landlords as it provides immediate income. It’s another challenge to look for and screen tenants, so having pre-existing tenants can mean less stress for you.
Older properties are also usually located in more central and desirable areas. This is because they would have been established long before newer developments popped up. If the rental property is in a good location, you’ll likely have little to no trouble finding new tenants should the need arise. Of course, this isn’t always the case for old properties. But in general, older properties offer a strategic advantage over newer ones in terms of location.
Cons of buying an old rental property
Should you decide to buy an old property, be prepared to shell out a bit more for repairs and maintenance. Especially if the building has vacant units, you will need home rubbish clearance services to help you fully empty the units and eliminate any hazardous materials. Once the units are clean, you can then start making repairs, such as fixing the plumbing or electrical wiring. All in all, these expenses can add up quickly, so be sure to factor them into your budget before making an offer on an old rental property.
You will also be held responsible for any damage that the previous tenants may have caused. This is something to keep in mind when considering an old rental property, as the cost of repairs can sometimes be quite expensive. If the damage is extensive, it might even be worth it to buy a new property instead of an old one.
Ways to earn more from an old rental property
Though it sounds like a lot of work to invest in an old property, you can still turn a profit if you do it right. For instance, you can turn a rundown apartment building into a more modern and luxurious space, which can then be rented out at a higher price. This is a common strategy among real estate investors and can be profitable if done correctly.
You can also look into ways to reduce your expenses, such as doing the repairs yourself or hiring a property management company to help you screen tenants and take care of the day-to-day tasks. With the right strategy, you can make a lot of money from an old rental property- it just takes a bit more work than buying a new one.
Lastly, you can also consider transforming the old property into a commercial space for businesses. As old rental properties are often in good locations, it won’t be difficult to find businesses that are willing to rent the space. This can be a great way to earn a steady income from your old property. This can be a great way to earn a higher return on your investment, as commercial properties typically go for more than residential ones. It might require a higher upfront investment, but it can be well worth it in the long run.
The bottom line
All in all, there are both pros and cons to buying an old rental property. It’s important to do your research and weigh all the factors before making a decision. Buying an old rental property can be a great investment, but only if you’re prepared for the challenges that come with it.