Keep renting or Owner finance

[Jay Dean]

I own a condo free and clear.

After repairs, I have about $60,000.00 invested.  I can rent the condo for $875.00 and it nets about $200.00 per month.

I am weighing to options:

Option A - Continue to rent.  Net $200.00 per month / $2,400.00 per year.  Look into a cash out refinance (approximately 70%) and use that toward a second unit.  Estimated total leverage 30 - 40 %.

Option B - Sell offering Owner finance.  Sales price $65,000.00.  30 year term at 10% interest.  The goal here would be to find a person or couple with solid earnings and not so good credit.  This would be key to get these kinds of terms.

On their side of the deal - $570 Mortgage, $75.00 Taxes, $225.00 HOA fees - Total - $870.00 excluding expenses (same as renting).

On my side of the deal - Receive $570.00 per month (nearly three time what I am currently getting).

I recognize that I lose my cash position by using this option, but I see this as guaranteed money coming in monthly.  If they don't pay, I foreclose and repeat the process.

Not sure I fully understand the tax implications of the owner finance option.

Please share your thoughts and ideas.

Thank you.