You’ve moved out of your home and now the house sits empty. Now what?
While rental properties offer attractive monthly income, there just might be a much better option.
Here’s five reasons to offer owner financing instead of being a landlord…
5 Benefits of Seller Financing Over Renting Out Your Property
All the Income Without the Maintenance
Responsible landlords and rental property owners have endless lists of projects, repairs and regular maintenance tasks. If you want the income, without the monthly checklist, seller financing can help get those items off your to-do list!
From repairs and yard work to cleaning up after the last tenants, as a landlord it is your responsibility to keep the property clean, appealing, and in safe working order.
Seller financing offers a steady income, without all the work and responsibility of renting. After all, they “bought” the house—which means they bought the maintenance.
Don’t forget about property taxes, insurance, HOAs, special assessments, and more! When you take back a mortgage you become the bank – and those expenses become the buyer’s responsibility.
Control the Price
Rental prices fluctuate. Each new tenant means renegotiating rental prices. While this can work in your favor depending on the market, it can also hurt you.
If the area suddenly becomes inundated with available rental units, you may find yourself charging lower rent just to fill the space.
The Same Tenants
Like the fixed price, with owner financing, you keep the same occupants, but instead of tenants they are owners. You build a relationship and establish trust. Additionally, they are investing in their own home.
People tend to treat things better when they own them—and pay for them.
While most rental tenants are respectful, it’s always possible to find those few bad apples. With seller financing, your tenants own the home for the long term. Whatever damage they do to the home, is damage they have to fix.
Less Stress Over Monthly Payments
When the buyer stops paying, it’s always a stressful situation.
With a rental property, the actions towards repayment are more immediate. With less money on the line, it’s easy to get them to start paying again. Also, if worse comes to worse, eviction takes far less time (and money) than foreclosure.
In owner financed properties things tend to move slower when getting the note performing again. Luckily, a buyer has more equity than a renter—giving you more leverage when collecting on late payments.
While foreclosure takes longer and is more expensive, you own the property again in the end. With defaulted rental payments, property owners may never see the missed payments.
And, your options don’t stop there.
Easy Exit Plan
Ever want out of owner financing? It’s as easy as requesting a free online quote.
Selling your mortgage note is always an option, exchanging future monthly payments for a lump sum of cash now. With rental properties, getting out isn’t as easy—it requires selling. And with tenants living in the home, that can get messy.
Deciding between renting your home or offering seller financing? Why not get the best of both worlds with owner financing—steady monthly payments without the monthly maintenance.