If you own a rental property you collect a monthly rent check, but you also carry a load of responsibilities such as maintenance and repairs etc. What if you could get the tenants to take on these responsibilities, but still give you a monthly check? Better yet, what if they were eager to do it? It is possible to have your cake and eat it too; let me explain.

Let’s say you own a small rental or a mobile home. Instead of advertising it for rent, advertise it for sale with seller financing (I wrote a previous article on seller financing if you would like to know more). If you only request a modest down payment and the monthly payments are affordable your phone will be ringing off the hook. The opportunity is very attractive to those unable to purchase a home by other means. There is a huge market of individuals who can not obtain financing by traditional means for reasons not related to being irresponsible. An illness or job loss in the past are just two reasons why someone could have a very low credit score and be prevented them from getting a mortgage. Their circumstances are different now and if given the opportunity could prove to be very reliable with their payments.

Sellers who offer their homes for sale like this are often able to get 15% to 20% more than market value. And because your new “tenants” are actually the owners of the home, they are responsible for maintenance and upkeep. As a matter of fact they will take better care of the home than regular tenants would because they will have pride of ownership. Additionally you will set the interest rate slightly higher than what the banks charge.

But what if they default on their payments? You almost hope they will, because you will simply foreclose; keeping the down payment and any other payments that have been made. You will then list the house for sale again and start the process all over. You want to make sure that you are well protected, so it is very important to have a real estate attorney prepare the required contracts for you.

So there you have the secret to getting your tenants to shoulder the brunt of the responsibilities associated with your rental property, while increasing your profits. And if they do payoff the entire loan over time, that is great too. You have succeeded in obtaining consistent passive income, earned a higher than market rate on your capital and sold your home at an above market price. Sounds like a win, win, win to me.