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Updated over 11 years ago,
CREATIVE SOLUTION NEEDED!
BP Experts,
I have a tenant in a property nearing the one-year mark of a two-year lease. She just contacted me and told me she and her husband are getting a divorce, and she will no longer be able to afford the rent. She has asked if I could lower the rent to something she could afford, which would be another $250/month from what I would consider a very favorable rent.
The good news is, I've been kicking myself for signing a two-year lease on the property, as this summer would have been a good time to sell. The property is costing me money every month. Not a lot, but it was an accidental rental. It was a former residence that I turned into a rental with the intention of returning to live in it at some point. That potential option is now off the table, so I would like to sell it and reinvest in a property with positive cash flow.
So, I'm looking for a win-win solution here. I'm considering accepting a reduced rent and not enforcing the lease in exchange for assistance in getting the property ready for sale (basic touch ups, paint, small repairs, etc.), always having the property ready for a potential buyer to visit, and moving out as soon as the property is sold. I would help out on the move if possible.
The only potential problem I see is there is basically no incentive for the tenant to put in 110% effort to help me sell the property since she is getting a reduced rent (I'm having flashbacks of the movie "Stepbrothers" when they pull all kinds of shenanigans in order to keep their parents' house from selling!). The other option I was considering was offering whatever is left of their security deposit after repair costs and whatever costs are incurred due to the reduced rent (the difference in their lease rent and the agreed to reduced rent) as an incentive. Thus, the sooner the house sells, the greater portion of their deposit they would get back.
Not sure if anyone else has done something similar or has any recommendations for me, but I would appreciate any wisdom you have. Thanks!
David