Investor Series – Land Contracts
January 15, 2023
This is another submission in our ongoing series of investor articles. Today we’re going to talk about Land Contracts.
Land Contracts are a type of financing where the owner agrees to sell you their land (and all the improvements on it) over time. The owner basically is the bank and you can take possession of the land once the contracts are signed. You own title to the property and full control of it and simply owe the seller for the agreed upon price which is paid in installments over a period of time.
The benefit of purchasing land this way is there are very little qualification requirements. As long as the seller is comfortable with your situation and you have the funds, the transaction can be completed usually very quickly. If you’re in a unique situation financially and professionally, land contracts can be the only option for you to acquire property.
The drawbacks of buying under land contract usually revolve around paying a premium for the property. Sellers understand Land Contracts are very desirable financing and they usually can command a premium price or terms in order to offer such financing. Buyer’s need to weigh the premium charged and decide if its worth it to obtain this financing on a property.
