how to incentivize tenant to use my realtor/lender when buying

[Julia Brown]

Hello! 

I have a potential tenant for my first investment property. He’s looking to buy a home at the end of our 12 month lease. 

In one of the bigger pockets podcasts the guys mentioned offering tenants like this a deal/discount for using them as the realtors in the purchase transaction. 

Looking for additional information on how that is structured, is it part of the lease or just a verbal commitment? What and how much is being discounted? Etc. 

Thanks for the help! 

[Will Fraser]

Hi @Julia Brown!  This is a useful strategy and one that provides an additional stream of income that is ideal!  

I would recommend not doing anything formal, but rather using your built-in-top-of-mind relationship to position your agent and lender in front of the tenant.  If the tenant is on a 12-month lease and intending to buy afterwards, then you can pretty much deduce their time-frame and work off of that.

I do want to be sure to issue a word of caution here:  you've said "my realtor/lender" so I don't think you are an agent yourself, but it bears saying . . . be very clear on your state's real estate laws regarding inducement.  A few states, like my Oklahoma, have made it illegal to do anything that could be construed as inducing a buyer of real estate.  Anything official in a lease agreement, or even a handshake assertion that "your last month is free if you use my gal" would be a straight up inducement, and in states with tight anti-inducement laws straight up illegal.

Otherwise, induce away!  But I would encourage you and anyone else out there looking to tap this second income stream -- look for ways to do that in the spirit of the anti-inducement laws.  Deliver the best value and services you possibly can, period.  When you are recommending X lender or Y realtor or Z plumber, do so because they are the best, and so obviously you would want this other person to use X, Y, or Z because they are the best!   The other option is "I want you to use this person, not because they are the best, but because I get some cash every time I send someone their way."    One of these paths is better, but books like The Referral Engine walk through why and how Path #1 profits.

Best of luck out there!