Land contracts rank as some of the most exciting and profitable 2010 investment strategies. This contract is between a buyer and a seller of private property. This property could be an improved or unimproved property, a vacant property, a home, or a commercial building among other properties.
A down payment is normally required after which a buyer can use the property for the purpose it was intended. The contract duration is usually ten years and the seller usually keeps the title deed until full payment. Monthly payments are made and at the end of the contract a balloon payment may be required to settle the remaining amount.
The seller usually finances all the necessary transactions so there is no need for a buyer to get a bank loan. This means that even people whose credit score is low may be eligible for this type of contract. Those who are unable to get loans from banks and those who do not have a constant source of income could therefore consider such contracts.
You do not incur costs for example title insurance cover for lender. You may not also require new fees for survey. Since you and the seller have agreed on what the value of the property is, you might not need a land appraisal. You are not charged any discount points that are normally charged by other lending institutions.
Since bureaucracy is minimized, the process could be finalized quickly. Furthermore, you could still enter into another contract as you continue to pay for the existing contract. This is possible because the involvement of the bank is usually eliminated.
Land contracts take a shorter time to repay compared to other kinds of loans on property. As a buyer continues to pay, he could still enter another contract. When he completes the payments, he finally acquires the deed. No wonder this contract is a lucrative property investment strategy for 2010.
For the best advice on Land Contract investing, visit USA Property Investor, then read their FREE ‘Land Contract Investment Guide’ here.
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