Owner financed land investment allows interested investors with low or no credit score to skip the elaborate mortgage and loan sanctioning processes at banks. Mainstream lenders tend to charge high interest rates or reject such loan applications after a long wait.
On the other hand with the owner financed land investment option, you can connect with property sellers and borrow money from them as per a set contract between you and the seller and buy their property.
The property seller might keep the documents of land ownership on hold until you repay the outstanding amount.
Now that you have an idea on what is owner financed, check out below why buying owner financed land makes sense.
Table of Contents
Reasons Why Buying Owner Financed Land Makes Sense
1. Simplified Qualifications
It is no secret that land investment in today’s times of spiking real estate prices requires you to opt for different financing options such as loans against properties or mortgages. However, mainstream banks tend to apply several rigid eligibility criteria for approving loan sanctions.
Consequently, people with low credit scores, or comparatively lower income might find it hard to get their loans sanctioned. Such instances make buying owner financed land a go to option.
To buy owner-financed land for sale, you do need to have a high credit score or pay a huge down payment. This highlights the flexibility that the owner financing option brings to the table.
2. Agreements
Opting for cheaper owner financed lands for sale allows you to execute and fund your land investment plans with comparatively flexible contracts.
As the nuances of what is owner financed land allow investors to borrow money from the property seller, the contract terms can be flexible. It eliminates the need of a third-party authority such as a bank. Therefore, you would not need to pay processing fees and other additional charges that are associated with banks and other lending institutions.
It is also important to note that repayment tenure of buying an owner financed loan can also be flexible. Nevertheless, as your credit score can be low, property owners can charge higher interest rates than mainstream banks and lenders.
3. Lower Expense
If you are wondering, is owner financing worth it for land investment? This is another point to consider.
While opting for mortgage and loans to fund your land investment goals, you must take an array of hidden costs and expenses into consideration. This increases your dues over the period and you end up paying much more than your loan amount.
However, this is not the case with buying owner financed lands. With this alternative, there are few to none additional charges as per your deal with the seller. This makes repaying the dues more affordable and quick.
4. Transaction
By choosing owner financed lands, you do not need to wait an elaborate period to start your land investment process. Furthermore, unlike mortgages from mainstream lenders, you do not have to wait for month ends to pay your dues. You can repay the monthly obligations anytime as per your convenience. Transaction is quite easy with buying owner financed land.
5. Investment Potential
As the prices of real estate properties in the USA skyrockets, it allows you to reap long term benefits from land investment measures. By investing in owner financed lands you can unlock diverse potentials of land investments. As an economic process, it is much more flexible, quicker and easier for investors to manage the terms and conditions of borrowing land. Thus, it becomes a notable highlight among owner financed land for sale pros and cons.
6. Advantages
Buying owner financed land is a win-win situation for both the parties involved. The seller can set the terms of sale and lend money on the terms that fits right for them and receive the borrowed money with interest. As an investor you can fund your land investment plans without involving the bank or mainstream lenders. Also you can utilize tax benefits that come with land investments by buying owner financed lands like traditional land investors.
Bottom Line
This is everything you must know about the perks of buying owner financed lands and why it makes sense.
Unlike mainstream mortgages, owner financing is a great tool to access benefits of land investment even without a sky high credit score. So, are you looking for best owner financed lands to go ahead with your real estate investment plans?
For the best owner financed land options in the USA, explore our land listings at APXN Property.
