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crystalwillett Category: Rehabbing Fun
Current Grade: A
Total Views: 2197
Member Comments: 7
 Posted on: 03/06/2007
Posted by: crystalwillett
Blog Points: 5079
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I am thinking of buying a property where the renters are already established.  How does the security deposit work?  Does the owner pass the security deposit over to you to hold?  Is it held in escrow somewhere? Does he keep it and you have to deal with it?  What's the typical way to buy a house where renters want to stay?
Current Grade: A
Category: Rehabbing Fun
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Vieving 1 - 7 out of 7 comments
Jeff_Tumbarello
Ambassador
Posted By: Jeff_Tumbarello on 10/21/2007

should go right across the front page of the hud

it cuts down your cash to close

 
West Coast Dave
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Posted By: West Coast Dave on 05/06/2007
Security deposits and rents are prorated. So if rent is due on the 1st, close early in the month to get the most money. The money is transferred to you from the sale of the home by escrow.
 
shellikm

Posted By: shellikm on 03/09/2007

Yes, you get the security deposit at closing, if they have one.  You will want to get a copy of the leases, its a good idea to write this into the contract.  You then have the option of backing out of the deal if you don't like the terms of the lease and it won't work for you.

If you do take the property  complete with tenants and they have no security deposit, I would want to get one from them.

 
Homes In America.net

Posted By: Homes In America.net on 03/08/2007

When you are buying a home you do not need to take any extra baggage if you not choose to.

If you choose to take an existing tenant credit checks and criminal background check should be done to your standards.

If you have decided  to take the tenant along with the house try to make the closing at the beginning of the month not only will you be entitled to the security deposit the seller will be obligated to pay you the prorated balance of the unused portion of the rent for the month.

 

 
Property Management and YP Consulting
Ambassador
Posted By: Property Management and YP Consulting on 03/07/2007
In addition to the great points that the other guys have made, you should know that you actually HAVE to take the new renters if they have a lease. Mind you, that is, IF THEY HAVE A LEASE. If they are living there Month-to-Month, then you can legally tell them that they can no longer stay after you obtain ownership. And, like I menationed, when you buy the house, you are legally obligated to honor any existing lease, even if that means having a crappy tenant for 8 more moths. I'm all about buying houses with renters already there, because it means that you don't have to find renters and carry the costs until then. But Matt's cautions should be headed. Good luck with that. Keep me posted sister, Abe
 
Matt Miller - Content Director
Admin
Posted By: Matt Miller - Content Director on 03/07/2007
Make sure you do your due diligence checking out your future tenants. They may be a total nightmare and that's why the owner is selling. He'll tell you everything's great, but get the tenants reference of the previous couple of places they rented, besides just running the usual credit check. If you wouldn't rent to them after your check, make sure they don't come with the house!
 
Real Estate Investor
EducatorAmbassador
Posted By: Real Estate Investor on 03/06/2007

Hi Crystal,

Yes the Owner would be obligated to give you the tenants security deposit. After all, its not his money.  You may recieve a credit at closing or you may recieve an actual check. That deposit is a part of the lease. The same lease you would have to honor.

 

Hope that helps,

Sean