Rent Credit Question

I have a potential tenant that is very high on my scale of tenant’s for my park.

I just brought a nice 1993 3 bedroom onto my park and they want to purchase it on a rent credit.

They would put $1,500 down and I would rent credit about $15,000 for them.

The problem is they mentioned they might move out of the area in 2-3 years.

What happens to the rent credits?

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They disappear.

Not sure you should be talking about $1500 down. That seems to imply you have some kind of agreement to sell that particular home to them, which makes the rent payments actually mortgage payments. The whole rent credit is a kind of dodge to be able to “sell” a home on time but not legally be a considered a mortgage. Everybody went to rent credits after a judge decided that rent-to-own was just a mortgage by another name (which if you think about it, it is.) One of the key points about the rent credit program is that the tenant can use the credits towards any POH you own. That is what keeps it from being a mortgage. Take the $1500 as a security deposit.

If they are really going to move in 2 to 3 years, the rent credit program really is not a good fit for them. And it would well be a looser for you too, if it costs you more than $1.5k to get the home ready for the next ones.

Why not sell it out right and get out of the MH rental business.

Don’t most people still take downpayments even under rent credit program? If not, what assurance do you have that people will take care of the home as if it’s theirs?

That is what a security deposit is for. But it does not seem to work very well.