Land contract vs rent to own - Which do you prefer?

Asked by Buynowgr.com, Grand Rapids, MI Mon Jan 23, 2012

We deal with land contracts and rent to own properties around the greater Grand Rapids MI area.
We would like to know which do you prefer and why?

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Answers

7
Christopher…, , Michigan
Mon Jan 23, 2012
I believe that they both have their place depending on the deal and the potential buyer.

If a buyer comes in with a substantial deposit, we do tend to put them into a Land Contract as it secures their position more and they are less likely to pull out.

Cheers,
Chris
1 vote
Staceylackey, Home Buyer, Indianapolis, IN
Sun May 17, 2015
landcontract/rent to own we just payed off our home in this june amount was 25,000.00 it took us 5 years @ 520 mounth. we are happy with this kinda payments.....
0 votes
Bob Jakowini…, Agent, Livonia, MI
Mon Feb 6, 2012
Just what you and a few others have said. There is a time and place for each but what I really like is when someone specializes in them and not just a generalist with everything
0 votes
Buynowgr.com, Both Buyer And Seller, Grand Rapids, MI
Tue Jan 31, 2012
Thanks for the feedback. It's always good getting other perspectives.
I agree that an absolute must with land contracts is a decent sized down payment.
Our focus is on land contracts because once it is time to cash out we have found it easier for the buyer to refinance vs purchasing. Our second reason is we can offer a lower payment because the buyer can claim their homestead as well as no overhead that we experience with rental properties.
Their are some downsides such as taking longer to get someone out upon default (hence the needed down payment) etc. So I do believe there is a time and place for each.
Thanks again.
Justin
Web Reference:  http://www.BuyNowGR.com
0 votes
Allison Fish…, Agent, Ann Arbor, MI
Tue Jan 31, 2012
I agree with Christopher, They both have there place and it really depends on the situation of the buyer.
0 votes
Pam Bava, Agent, Rochester, MI
Fri Jan 27, 2012
It really depends situation and committment to living in the property. You may need a substantial down payment with a land contract with specific terms to purchase. So if you are ready to make a committment this could be your type of transaction for you. With that said remember the interest rate will probably higher then banks and any default could cause the owner to get the property back. You may want to discuss the contract with an attorney also.

Good luck
0 votes
Don Tepper, Agent, Burke, VA
Mon Jan 23, 2012
Part of the answer depends on where you're located. Up where you are, in Michigan, land contracts are well-known and appear to be the preferred method. Where I am, in Virginia, land contracts are less common whereas lease-options are better known.

And, as Christopher notes, it all depends on the specifics of the deal as well.
0 votes
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