At various points throughout a real estate investor’s career, a decision must be made regarding the disposition of a particular property. Some decisions are made before the property is acquired, when a buy and flip analysis is completed. Yet selling to your tenantsother times, an investor decides that it’s time to sell or rent a unit, and which choice is better?

With regards to capital acquisition and funds are needed for other projects, then the answer is obvious, sell the property to a buyer. Yet there are times when the property can’t be sold at the price needed or there is a lack of qualified buyers, so the owner typically resigns and decides that the best available option is to rent out the unit until a buyer can be found. But what if the buyer is currently living in the property? That might be a very good prospect to approach when you’re ready to let go of a property.

First, contact the renters and ask if they’d ever considered buying their own place. Of course, most renters would, they just don’t think they can afford to. This is especially the case with first time home buyers. The home buying process and qualifying for a mortgage can be rather intimidating for newbies and sometimes they need just a little nudge.

Because you’ve properly screened your tenants at application, you know they’ve got good credit and can afford the rental payments. And in today’s market, it’s likely that a mortgage payment is actually lower than renting. But ask them and let them know about various first time home buyer programs and how the FHA loan only requires 3.00 percent down. And you might even be able to contribute some toward their closing costs.

If they’d like, you can even have your mortgage loan officer contact them to explain the process. Most first timers are surprised at what they can qualify for and how easy it can be and need only a nudge or two. Besides, when selling one of your properties, how much time and commission can you save by selling to those living in your property?