8 Reasons Seller Financing Beats Renting

Most new investors follow the same path. 1)they invest their hard-earned cash into single family homes, 2) they spend more money to repair or rehab, and 3) they rent them out. This formula has worked just fine for some, and not so well for others. It is a cash intensive approach that lacks a certain creativity. For me, real estate investing is a thrill simply because we can get so creative when putting together deals.
Usually, newbies buy cheaper houses built in the 1950s or earlier because the rate of return is higher, however, the expenses and repair headaches on them are also higher. Sometimes renters cause so much damage to these properties it can drive the investor to bankruptcy.
Most new investors do not realize there is another path known as seller financing that can be used rather than renting it out. Instead of a renter, you would have a buyer. Your occupant is purchasing the property from you over time. This way the occupant has an ownership interest in the property, a sizable down payment, and an incentive to maintain and improve the home.
Seller financing is when the seller finances a real estate deal. The seller assumes the role of a banker and carries back the loan. The buyer makes a promise to pay (by a promissory note) and the property serves as collateral.
There are eight main advantages to owner financing over renting property.