That doesn't mean to jump into the pond by raising everybody's rents at the same time. It means to select marginal properties, or good properties with marginal tenants, and offer them for sale to the tenants. Check with your local "can-do" mortgage broker and see if there are any favorable loans out there that will enable a tenant to qualify as a first time homebuyer with a low down payment and low interest rates. Also see if you can give a tenant a "reverse rental credit" that more or less pays him back his rent payments if he can use them as a down payment.
This is going to be little more than a re-cycling of previously paid cash from rental income into un-taxed equity that can then be exchanged into better houses with more potential, but if you can do it, it can really motivate tenants to buy when combined with the $8,000 first time homeowner cash tax credit.
Write the tenants a form letter and give them an Option to buy for the next 30 days. Instruct them to contact the mortgage broker to see if he can't get them in with little or no cash, and with payments less than their rents will be next year. At that time inform them that the rents are being raised. So they have a choice of buying or moving. Where did I come up with this idea? When I was a kid in the middle of WWII, my folks were forced to buy the house we lived in because there was no other place to move. It worked then, and it will work now.
J._Jack_Miller
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