- One of the benefits of using owner financing is that you can make more money on the sale of a property. Since you are offering financing as part of the deal, you can ask for a higher sales price from buyers. In addition to the higher sales price, it also allows you to earn money on the interest from the financing. When you use this method, you could potentially make thousands of dollars more than you would be able to make on your house otherwise.
- When you use owner financing, you can also attract more buyers than you would through a traditional sale. Many potential buyers cannot qualify for a traditional mortgage and would be willing to use owner financing instead. By increasing the number of potential buyers, you can move the property quicker. This allows you to start bringing in a regular income from the mortgage payment that your buyer will provide. If you have a property with some issues that is difficult to sell, this kind of financing can help speed things along.
- One of the potential problems with this type of financing is that you may not be successful when choosing the buyer. If you choose a buyer who cannot afford the mortgage payments, he may eventually stop paying. When this happens, you will be forced to handle the foreclosure on the property yourself. This can get expensive when you have to handle the legal expenses to get the buyer out of the property.
- Another problem with owner financing is that it could lead to abandonment. If the buyer of the property decides that she no longer wants to live in the property, she could simply pack up and leave. At this point, the payments that you were receiving on the house will not continue to come in. You will then have to go through the process of fixing up the house and then finding another buyer for the property.
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