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Is Selling Property with Owner Financing a Good Idea? The Pros and Cons of Seller Financing

Owner financing can be a good idea, but not always. See if it's the right choice for you by comparing the pros and cons.

[Updated: May 19, 2021 ] Dec 19, 2019 by Liz Brumer
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Pros of owner financing a property Cons of owner financing a property
• Reduce capital gains taxes over several years

• Earn passive income

• Adjust the loan terms to get you a desirable rate of return

• Release ownership of the home -- meaning no maintenance, taxes, or tenants

• Buyer could default requiring a possibly lengthy and costly foreclosure process to get the property back

• Underwriting documents and complying with the Dodd-Frank Act