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Last Updated: May 14th, 2012 - 22:24:01 |
How can you get your rental investment property to pay for your Let Your home mortgage? How can you get your renter to keep up the investment home and collaborate with your plans for a future home sale?
There are two techniques that real estate investment owners use to encourage their renters to cooperate on the future sale of the investment home that they are renting. One way to incite cooperation from your investment property’s tenant is by offering the renter a “lease with option to buy” contract. A second way to stimulate assistance is to offer referral fees, matching closing costs payments and a future commission bonus for any real estate leads that the renter provides the tip for you to buy.
To begin with, home improvement costs in your home will not be jeopardized by disgruntled tenants, if you sign a “lease with option to buy” contract with them. Knowing that they will be owning their particular investment home soon, they will not cause undue problems. They will pay their rent on time. And they will keep the investment property in good shape. They know that if they trashed the house, they would be trashing their own investment. Yes, they will continue as trouble-free tenants, easy to deal with.
However, what if the current sale leads on the investment real estate show that you will make a much greater profit by selling it to somebody else? In that case, you do not want to sign a “lease with option” to buy contract with your renter. Your morals hinder you from lying to the renter by claiming a goal that you really have no intention of keeping.
Or with some investment properties, you might find that offering a lease option is not practical enough compared to the rent you will continue to make. In that case, you can find a renter's insurance paying tenant who can be guided to take that extra $100 or more and put it instead in an escrow account towards a future down payment of a future mortgage loan. You explain to your tenant that you are an investor who buys and sells numerous quantities of investment properties and that if they help you find cheap mortgage loan leads, then you will give them a referral fee.
This will serve as your renter’s insurance equivalent, because they will take much better care of your investment home, if they are working in collaboration with you in finding more investment properties.
Equal to any commercial real estate brokerage, you may offer a referral fee for the tenant finding mortgage leads for you. Or maybe you offer them a 1% commission on flippers that they point out. Keep them happy tenants of your investment home.
There is another way to convince tenants that your investment property can earn them profits if they help maintain its condition. Through equity, sharing you can keep the tenants working for you on the upkeep and maintenance. This will save future home remodeling costs. This can work with investment properties you previously own as well as the investment homes you are considering buying.
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