help me...would you sell if you were me?
i have 5 rental properties. all free and clear. one of my tenants wants to buy the property they live in. they want to do some sort of rent to own. they offered me 40k. willing to pay 700/month until it was paid off. i told them i would think.
i thought...
i spoke to my attorney. they recommend an installment land contract. i will hold the title in my name until the agreement is paid for. i will cover real estate taxes and insurance and the tenant/buyer is responsibility for pretty much everything else...utilities, maintenance, repairs etc...
i paid 17k for the property last year. i might have close to 3k in repairs over the past 12 months, so im actually in the property for a little under 20k.
the terms i presented to the tenant are 700/month for 96 months or 8 years. she pays 650 in rent so the installment deal isnt that far off. my total pay out will be around 67k. i explained that she will pay a premium for a home because she wouldnt get approved thru the traditional means. she doesn't have the best credit and probably cant document her income, but she has been able pay be my money every 8 months since she has been my tenant. if she defaults, i will take the house back and her money will be forfeited. if she completes the agreement she will be a homeowner before she is 30 years old.
she agreed to the terms. my attorney quoted me for his fees. my question to the forum, is this a slam dunk deal? is it weak considering its going to take my 8 years to make that return? should i lower the payment and extend the term to 10 years? thoughts? thanks in advance