Rent Credit? - Posted by John

Posted by ken on May 16, 2005 at 19:15:57:

When they apply for a mortgage i do not think the bank will accept that much as a credit

Rent Credit? - Posted by John

Posted by John on May 16, 2005 at 17:56:55:

I found a t/b for one of my homes. I was going to give them $350/mo rent credit out of $750 month total rent. I am doing that much because the place just wasn’t moving and because the purchase price is on the high end side. I was thinking about offering $400 rent credit if they pay $775 mo rent or $450 rent credit if they pay $800 for rent. Are there any problems with this?


Re: Rent Credit? - Posted by Sean

Posted by Sean on May 17, 2005 at 13:31:14:

Frankly I think you are pushing… 350 to 400 credit of a 750 rent? Banks are going to likely balk at that one…

You have to have your rent somewhere around MARKET rate, plus the credit. IE, if market rent is 500, and you rent it for 600 with a 150 credit, banks not going to balk… or 550 with a 100 credit… but if market rate is 700 or 750… and you credit them 350 or 400… that’s very likely to stink up the deal.

Personally I don’t give rent credits. If they want to pay above the rent rate, I’ll certainly apply that to their down payment, but there rent is their rent, period.

If you aren’t in desperate need for them to cash you out, why not create long term financing? Land Contract or Wrap Around and the like? Until they have 20% equity in property, getting rid of someone in a home on a land contract is the same as an eviction in my state…