5. Invest Blog

How To Help Your Tenant Buyers

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Sell them a duplex.

One of the problems new home owners or new Tenant Buyers have is that they can’t always afford the higher monthly payments needed to be in one of our Lease Option properties. The rent we charge has to cover all of our expenses such as mortgage, taxes and insurance. Then we have to add on an additional amount to build up a credit that can be applied at the time the Tenant Buyer exercises their option.

This money will be credited towards the purchase of the property and will be used as the down payment. All this added together is higher than some people could afford.

One way to help keep the monthly rent payments low is to find properties which have a source of income. These are houses that have a basement apartment or some type of rental unit in them that can be rented out. The rent from the apartment would help pay for the monthly Lease payment in their Lease Option agreement. There are a couple of ways this could be done.

  1. The Tenant Buyers rents the whole property from you at the price necessary to cover all the expenses and an additional amount for a future credit. They then rent out the apartment to another tenant and use that rent to reduce the amount they have to pay for their own rent.
  2. The other approach is that the Tenant Buyer rents the property from you except for the apartment. You take care of renting out the apartment to another tenant. You reduce the Tenant Buyers rent by a portion of the amount of the other tenants rent. Some Tenant Buyers like this because they don’t have to deal with tenants.

Both these approaches reduce the amount the Tenant Buyer has to pay every month. This makes these types of properties very attractive to me as an investor and helps us find Tenant Buyers really fast.

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