Keep tenant or ask for vacant possession

[Anonymous]

Hi there. I`m looking for guidance on a current deal. I am placing an offer on a condo that is currently tenanted and haven`t decided how best to structure the deal.

I have a soft heart for this particular low income/disabled tenant, but the deal doesn`t cash flow too well with him staying on as a renter (cash flow: $100/month). My other option is to ask for vacant possession so I can renovate the unit and rent it out for more in order to realize a $300/month cash flow. The renovation cost would be about $5000 and I would request a mortgage plus improvements so there is no additional out-of-pocket expense.

Any ideas? What would you do in this situation?

Thanks in advance for your responses.

 

[invst4profit]

I do not know BC regs but there would be absolutely no doubt in my mind if permitted.
I would ask for vacant possession or walk away from the deal.
If I was not capable of separating emotions from investing I would not want that tenant.

 

[MKBridge]

Good to see another investor from Vernon!

I agree, get vacant possesion and do the renovations. Once finished do your due diligence to get the best tenant, and the best cashflow.

Kathi

 

[margaretcowan]

You`ll need to make sure that the renovations are extensive enough to necessitate the tenant moving out, on a big enough scale so the tenant couldn`t still occupy the unit while you were renovating. Do some research on this.


Otherwise, you might get into a conflict with the good, old Residential Tenancy Branch if the tenant decided to fight your eviction notice. As we know, their rules and rulings often favour the tenant.

Good luck,
Margaret
Hi there. I`m looking for guidance on a current deal. I am placing an offer on a condo that is currently tenanted and haven`t decided how best to structure the deal.

I have a soft heart for this particular low income/disabled tenant, but the deal doesn`t cash flow too well with him staying on as a renter (cash flow: $100/month). My other option is to ask for vacant possession so I can renovate the unit and rent it out for more in order to realize a $300/month cash flow. The renovation cost would be about $5000 and I would request a mortgage plus improvements so there is no additional out-of-pocket expense.

Any ideas? What would you do in this situation?

Thanks in advance for your responses.

 

[trev]

QUOTE (margaretcowan @ Jul 16 2009, 11:43 AM) You`ll need to make sure that the renovations are extensive enough to necessitate the tenant moving out, on a big enough scale so the tenant couldn`t still occupy the unit while you were renovating. Do some research on this.


Otherwise, you might get into a conflict with the good, old Residential Tenancy Branch if the tenant decided to fight your eviction notice. As we know, their rules and rulings often favour the tenant.

Good luck,
Margaret
www.italycookingschools.com

Make sure that the tenant doesn`t still have first right of refusal to take the place back once reno is done.

In Ontario they have that right, and at the same rent as before reno....... only in Ontario probably, but better check

 

[Thomas Beyer]

Ask for vacant possession .. although you may not get it !

Why invest in Vernon ? is the rent to price ratio and upside attractive enough ? What does a "typical Vernon deal" look like ?

 

[NorthernAlex]

jlee..... your rental business is a business. Don`t have a soft heart on your expenses. If you want to do something support a local charity and/or do some voluntary work.

Would you mind showing us your math on the condo? As Thomas said, I would be interested how you calculated your cash flow.