Continue to rent or sell/owner finance?

Question

I own a single-family rental property outright, the cash flow is a couple hundred a month. The value has increased 4% annually for 3 years.   My tenant would like to buy the property with me financing it (at a 4-5% rate).  My question is... should I just continue to rent and let the equity build or owner-finance and lock-in a sell price and establish a larger monthly income stream?  Does it come down to simply a question of long-term investing versus steady income, or is there something I'm missing strongly in favor of one direction versus the other?

Ken A. · Answer

I am in Florida also, and prefer to do Rent to Own.  I will offer $200-$300-$400 rent credit per month ONLY if they pay every month on time, and also must buy the house in the future with their own loan.  I am kind of surprised your values are only up 3-4% per year, it's probably much higher retail price-wise.  Rent to Own is great because: 1. No need to foreclosure, just evict as usual.  2. Tenants act more like an "owner" and does not call for small repairs, etc.  You could also make them more responsible for more repairs. That will depend on your lease.  3.  I do the usual lease, and then have a separate form for the possible "ownership"/rent to own deal.