Land Contract is not that uncommon around here, similar to (rent to own) the land contract is drawn up just a standard house seller agreement only the owner holds the morgage. then the buyer pays payments which are twards the homes cost, usually keeping interest out of the deal makes it a bit easier as then you get into some banking laws set up by the feds. TAXS primarly. you have to send the buyier interest statements and they can claim it on thier taxes and you have to pay a higher tax on interest & dividends. (trying to think too tired /forums/images/graemlins/blush.gif )
anyhow I bought mine from my siser this way some 20+ yrs back paid off for almost 8 now. One other thing is how it is shown as final costs, sell it for a lower price and you won't get the tax hit, but also you don't have the reinvesting costs and it is not sold untill the contract is DONE and there is an ending buyout price (for as little as 10 bucks) which means you didn't make any profit on paper and since it is not RENT it is not subject to other tax liabilities dirrectly... only problem is if they default then you have a few issues foor getting them out sometimes... bare land is a NO WAAY as it is nearly impossable to retainn a hold on bare land.
also build in cost for insurance and taxes due as well as realestate attny costs. make sure those are paid for by OWNER but their costs are included in the cost per mo in the payments made by the buyer.
not sure on the tax laws anylonger but something to check on. now when are you going to start the rent to wn on brush hogs, rock rakes & blades? /forums/images/graemlins/laugh.gif
anyhow the RENT TO OWN is a good option, they pay RENT which is applied at a RATE twards the principal cost of the home. Ballon payments are a way to KEEP the home, rent it for 5 yrs and have a 50% ballon payment due on the last month. if it is not paid then they loose the principal and all is considered RENT. this is GREAT for the OWNER but well harder on the buyer... typical land contract/rent to owns are usually 5~10 yrs terms max too.
as mentioned above this makes the renters more responceable as they will be buying the home... they will treat it better USUALLY . make sure to check credit & all...
MarkM
