Converting a tenant to owner financed mortgage
I am wanting some pointers on why this is a good or bad idea. I offer my tenants a purchase option after 1 year providing they pay on time every month for 12 consecutive months. Then I owner finance the property for 20 years at 8% and add $200.00 escrow payment to cover tax and insurance. I have converted three properties and had one refinance and pay off. Would I be better off just continuing to rent the property? Are the tax consequences not in my favor doing it this way? What other negative consequences do you see in this type of arrangement?