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Updated over 8 years ago,
Selling a rental home on contract
I am selling a rental property to the current tenants. They have mentioned what they would like the deal to consist of and I am not really sure how to structure it best to make it the best possible outcome on my end. They began renting the house in August 2012 and have been fine paying rent of in the mid $900s during that time. They put down a $950 deposit, refundable at the end of their lease. I still have a mortgage on the home of $78,538.00 at a 5% interest rate. My payment with taxes and insurance included is $798. I am not sure if during this deal, I keep paying those two items or they transfer to their name? With those being rolled into the loan, I am not sure if that is even possible.
The renters suggested something along the lines of $90k purchase price. Wants to put 10k downpayment and pay around $1k month payment and proposed a balloon payment of like 7 to 10k a yr til paid off?
I do not care to carry the property awhile as they purchasing instead of renting will relieve me of my duties of upkeep of the ac and roof which both need replaced.
Give me your thoughts and ideas on how I may want to structure this to benefit. I assume I would get taxed on the downpayment as profit if I just used it to pay other debt, I would consider just rolling that into my next investment.