Originally posted by @Dayron Burgess: what you mean This is going to sound fairly negative, and I really don't mean it to, and I really am trying to give some constructive criticism here, but everything about your post is wrong. 

There are other web sites to find justifications to do the wrong things in RE, not so much here.Now, a Land Contract doesn't have rent credits, principal amounts are reduced in a note and they are a financing arrangement

Maybe I go overboard and some people get away with very simple JV agreements but those people will regret it when something goes wrong.  

The agent at Safeco is wrong.

There is nothing wrong with charging a non refundable application fee.There is time and cost involved in processing a tenants application.

In 30 years it doubles again.Considering alternatives for other investments where the ROI is fixed, this would make real estate seem a lot more lucrative.What am I doing wrong here?

This doesn't mean you're wrong of course, it just means what you're doing isn't getting you the results you want. 

To the lawyers in the room, what 'consideration' would have been given to constitute a contract if no money was changing hands for the option period.We all know California is backwards anyway, Texas doesn't do it wrong, you guys do!

Can someone tell me what I'm doing wrong.

Nothing wrong with rent to family or living in your income property(house hacking) especially if you're living for free.