Rent credit sliding scale

mobile home university
1

I’m buying a park that has very low income tenants in a slower market. I would like to offer them a new rent-credit program that allows them to choose their rent/credit depending on how much they can afford. So, for example, someone in a modern home worth $15,000 can rent it for $150, $200, or $250 and their rent credit will be 75%, 85%, and 95% respectively. After 63 months, someone who rents for $250 can buy the home. If they rent for $150 per month, it will take them 133.33 months to earn the credit to buy the home. An older home worth $7000 may rent for $100, $140, or $180 with the same percentages as above for rent credit.

Is this legal?

I’m working in a slower market and I want everyone paying at least $100 for rent but don’t want to force a low payment in case they want to buy the home sooner.

Another way is to create a base rent of $150 for the newer home (and $100 for older home) and anything they contribute above and beyond that will go 100% into the rent credit…would they even do this? I think they might since many of these tenants are very bad at saving for a down payment.

Other ideas?

Mark

2

First, you might be better served to just not buy this park. The rents sound low, and you are saying the economy is weak.

That said, if you do buy it, I’d probably just put everyone on the same minimum payment plan, and let them pay more if they choose.

We also actually give tenants 100% credit for their Rent Credit payment. We want tenants to be able ‘to see the light at the end of the tunnel’ and own their home more quickly.

My 2 cents worth,

-jl-

3

Thanks Jefferson, giving everyone a 100% rent credit does sound like an easy solution. Do you rent newer homes for more money per month?

For the record, the lot rent is $320 and the park is filling up as the weather eases up. I get close to a call per day on my ads which is slow but not bad. The cash flow is incredible.

Mark

4

Yes, newer homes go for more - typically $375, and older homes average about $200 (these prices are for the house only and do not include lot rent).

-jl-