How my rentals have driven $26k in tenant income beyond rent!

I became a real estate agent 5+ years ago after getting downsized from a corporate career during the recession. Real estate seemed like a good place for a flexible career that took advantage of my sales & marketing background as well as my strengths around technology. In addition, I had an interest in real estate investing and this made it that much more appealing. Today I own 11 rental properties in the Twin Cities.

Most of my rentals are townhouses and condo's in decent suburbs that attract young couples. Early on I figured out how to make a bunch of extra income off of my tenants that would benefit us both.

The secret to extra income from your tenants

That secret is that I offer the ability for any of my tenants to cancel their lease at any time if they use my as their agent to buy a house!

Maybe some of the rest of you are doing this too but to date this has provided me with $26,739 in real estate commissions from my tenants. And the kicker - they are all really happy about how it worked out!

Tenants love the option to be able to time their house purchase when they find the right home and guarantee that they won't be paying for 2 places.

Some Guidelines I follow

Here are some tips that might assist you to do the same -

• Advertise this when you market your rental properties. I've had people rent from me specifically because I have this in my marketing. How great is it to have them want to rent and stay in your rental until the time comes when they want you to sell them a house?
• I only do 12 month leases - after their initial lease expires I make all tenants renew another 12 month lease instead of a month to month option. I want them to use "me" to sell them a house and if I allow them to get out of their lease easily then they could just use another agent.
• Remind them when they renew a lease that this is an option you offer
• If it all possible, seek out tenants that could be future home buyers
• The timing on buying a home works well. Most tenants need 30-60 days to close on their purchase so this gives you a window to start marketing the property for a new tenant as soon as their offer is accepted. In almost all cases I have had zero vacancy. It has helped that many of the tenants moved out to their new house prior to the end of the month which has made it easier to turnover the property for the next tenant.
• Even if I did end up with 1-2 months of vacancy the commissions on a sale would almost always have been worth that trade off
• It helps that my rental properties attract the types of tenants that will make future homeowners
• This obviously only works if you are a licensed Realtor

I have at least 3 of my current tenants that will probably use me in the coming 1-2 years.

If you're an agent and you aren't offering this option you should!