Owner Finance or Lease?

Sell With Owner Financing or Lease?

When the market gets tough some sellers get creative. After all there is more than one way to skin a cat. Sometimes, as a last resort, you begin to consider offering owner financing your home, or, short of that, just leasing your property out until the market improves.

Let's look at the pros and cons of each.

Owner finance pros:

•· You get a higher return on your money than you would on a CD or savings account.

•· The buyer is more apt to take better care of the property knowing that it is his/hers.

•· You can sell the note for a discount should you decide you need the cash.

•· Repairs & all other property maintenance & burdens are the buyer's responsibility.

Owner finance cons:

•· In the event of a default, a foreclosure is more difficult than an eviction.

•· You will still have a considerable amount of record keeping to do.

•· Your cash is still tied up (unless you sell the note at a discount)

Leasing pros:

•· You can get tax benefits through depreciation.

•· You can generate income.

•· An eviction is easier than foreclosing should it become necessary.

•· You still own the property to do with what you wish when the market changes.

Leasing cons:

•· Most tenants do not take as good of care of the property as an owner would.

•· You are still responsible for repairs & other burdens.

•· Your property taxes & insurance may go up.

•· Your equity (cash) is still tied up in the property.

There are other additional things that come into play when disposing of property, but these are just a few things to think about. My personal opinion? I would go for leasing property. I know that can be a real pain, but it is nowhere near as painful as having to foreclose on someone that has filed bankruptcy.

Just something to mull over. Have a great day folks.