Buying a Rental Property

If you are thinking of buying a rental property there are somethings you need to consider, somethings you need to ask the seller, and somethings you need to put in your offer to purchase.
Questions to ask the seller.
1. Are any tenants in arrears? If so, how much?
2. Do tenants pay their own utilities?
3. When was the last time the rent was increased?
4. Do the tenants have signed lease agreements?
5. If owner pays utilities, copes of utility bills.
6. Ask for a copy of the financial statement showing income and expenses.
7. Does the building meet all the codes?
8. Are the rents always paid on time? Or are they a few days late?
9. How much are the property taxes?

Things to put in your purchase offer.
1. If there are deadbeat tenants that the current owner evict them before closer and that you get vacant possession of the building.
2. That the current owner be responsible for all eviction costs relateing to an inherited deadbeat tenant. You don't want to find out after you take possession that the previous owner lied about any arrears.
3. That the building meets all current codes. That the seller is responsible for bringing the building up to code.
4. All documents or copies of documents relating to the rental property be turned over to you. You will want copies of leases and any notices served on tenants.

You will also want to hire a certified building/home inspector who will provide you with a detailed written report. Make the offer conditional upon a positive inspection report. You might also want to get the advice of an accountant to find out if the property you are considering will turn a profit for you. If the rents aren't high enough to cover the operating costs it is obviously not a good investment. Make sure you have your lawyer look over all paperwork including leases. If he finds something lacking in the leases make it a condition of sale that new leases be signed.
Go to the library or book store and read as much as you can on purchasing and running rental properties. You'll want to go into this venture with as much knowledge as possible.