Installment Contract VS Rental

Selling our homes on an installment contract vs renting them out in our opinion makes them a much better investment and way less hassle.  This on top of our Investor warranty which i have talked about before make www.cashflowhomes4u.com great investment homes.   

Installment contract verses Rental

1.  On and installment contract you (The investor) own the property.  For the first two years of the note you retain vesting of title.  This means if anyone ever pulls up a property profile you will show up as the owner.  

Why is this important?

This is important because if your client ever defaults you can evict them rather than foreclose thus saving valuable time.  An eviction will only take up to 90 days whereas a foreclosure can take up too 1 year and in some states up too 2 years!

2. On an installment contract the client is buying the property as opposed to renting the property.

Why is this important?

Since the client is buying the home they will naturally take care of the home better. As we all know renters never tend to care about your property because simply put its not theirs! Ask yourself… Do you treat your rental car the same as your personal car?  Since our clients are buying the property they will take care of the homes better.  They will demonstrate the pride of a home owner!  Many of our clients start doing additional updates to the home as soon as they move in.

3.  On an installment contract the client is responsible for all maintenance and repairs.  

As an investor you don't want the hassle of dealing with small issues such as broken pipes, leaking sinks, etc.  With a rental property you will receive this phone call constantly.  This means you will have to micromanage your property.  With an installment contract (Since the client is buying the home) the client understands they are the owner and are responsible for all the repairs and maintenance of the property.  This is spelled out clearly in the Installment contract they sign when they purchase the home.

4.  The cash flow yields are net.  There are no unexpected expenses. 

Since the client is responsible for all fees and maintenance your monthly payment is also your net income.  As we all know one broken pipe can lead to a $3000 plumbing bill which wipes out your yearly profit.  With an installment contract this will not happen.  Your monthly payment is your net income.

5.  Impounds

All our contracts have mandatory impounds included.

Why this is important?

Property taxes are a priority lien against your property.  Should they ever fall behind you could loose your home.  All of our installment contracts include property taxes in the payment.  Taxes never fall behind.