rent credits....after one year

[timmym22 0]

Hey everyone,

I lease optioned my former personal residence a year ago. I gave the tenant buyers a $250 rent credit per month on a $1000 month rent payment. They have paid on time on the 1st 11 of the 12 months. One time they missed they paid 2 days later. We had a one year agreement. I told them i would work with them on the time frame if they paid on time. They put 5k down upfront. Now are contract is expiring and they want to renew. I told them i could not give anymore rent credits after year one.

1.How do i give them an incentive to pay on time for the next year even though i am not giving a rent credit?

2. If they pay after the 1st from here on out, could i penalize them and take away some of the rent credits they have built up to give them an incentive to pay on time?

3. Would it be out of the question to charge them another 1k to "keep their option" for the next year again even after they put 5k down originally?

[MichaelC 160]

1.How do i give them an incentive to pay on time for the next year even though i am not giving a rent credit?

The fact that they have $8,000 at risk already should be all the incentive they need to remain good tenants and still have their option to purchase available.

 

2. If they pay after the 1st from here on out, could i penalize them and take away some of the rent credits they have built up to give them an incentive to pay on time?

I'm not a lawyer, but my opinion is you would not be able to penalize them in this manner.

 

3. Would it be out of the question to charge them another 1k to "keep their option" for the next year again even after they put 5k down originally?

Not at all. I recommend doing so in deals like this.

 

They sound like very good tenants, Timmy. Paying on time each month, $5K down. I would do everything in my power to keep them in my property if I were you. I would sit down with them and find out their plans for exercising their option. Light a fire under them and tell them you want them to speak with a mortgage broker or two to lay out a plan for qualifying and buying. Ask for another grand now to retain the option to purchase, remind them they are no longer receiving rent credits, get them on a plan to get qualified, and keep 'em happy. Everybody wins.