I used to sell homes on contract. Now I do lease with an option to purchase. However now I am thinking of going to a rent credit system like Frank and Dave. However I like making sure my new customers have a reasonably large amount of money to move in. It helps weed out the undesirables and makes the new tenant feel like they are committing to staying at their new home. My question is how I should require the new renter, using a lease with rent credits, to have more money up front. I had 2 ideas. 1. Make the tenants pay more than one months rent and deposit up from. Maybe first 2 months rent and 1 month deposit?2. Have a “non refundable move in fee”… Just tell the new prospective tenants that we charge 1 months rent plus 1 month deposit, plus a $500 one time move in fee…O and by they way we have a rent credit system where XX% of your rent is given back to you in rent credits. Is it legal to charge a move in fee? Or I could say the first months rent is rent plus $500. Any thoughts? Thanks guys!Briton
A Rent/Credit is nothing more than a straight rental in which the customer has the ability to use, at their sole discretion, the credits they build up, same as cash, to buy any home in the park. It is similar to the Southwest Airlines Frequent Flyer Miles, and is designed to garner greater customer retention. You cannot construct a rental that even remotely appears to be a mortgage, or you might be deemed to be creating “disguised mortgages” which is not allowed without being SAFE Act licensed and Dodd-Frank legitimate. Before you do anything, I would 1) talk to your state MHA 2) Research the subject on Google substantially and 3) talk to some other park owners to see what they’re doing in the same state.