Sell Rental and Owner Finance Instead?

[John Terry]

I have a rental that I own free and clear. The tenant wants to buy it and owner finance it from me. I am trying to decide what I should do. Opinions wanted.

Details:

Original Purchase price $136,500 Feb 2019 (single family house, about 15 years old, original HVAC and roof)

I net about $12,137/yr renting after taking out taxes, HOA, insurance, maintenance allowance. 8.9% annual return. Single family house. Easy to rent. Had 20 applicants and 3 fully qualified tenants in 1 week.

Tenant purchase price $165,000

Cash down payment to me $24,750

$140,250 financed by me @8.5% interest only. $993/month or $11,916/year

Tenant will not sell or refinance for 5 years (can sell back to me)

Investing the $24,250 will take the net income from the owner financing above the projected annual rent.

I own 3 other rental units and I have one other owner financing deal.

The obvious benefit is not having to deal with maintenance. Obvious downside is no further appreciation or income in 5 years.

What have you done in a similar situation or would you do?

Thanks!

Richard