The Big Move: My tenants want to buy my $620,000 property. Can they pay me for 10 years, at 7% interest, instead of taking on a mortgage? 

by | Nov 8, 2023 | Stock Market

Dear Big Move, I own a home in Colorado where I always planned on retiring, but now I am not moving back. I bought it for $200,000 and it was, at the height of the market, estimated at $620,000. It has been a rental since 2004 when I was deployed, then transferred. 

The couple renting it are interested in buying, given that prices are falling. Could I be the lender? How would that work? Also, would my capital-gains taxes on the sale be based on the entire sale price? And how would a mortgage payment be taxed? I wouldn’t want a loan to last 30 or even 20 years, but 10 years of steady interest payments around 7% seems like a pretty good deal to me. Landlord  ‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage. Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at [email protected] Landlord, It’s nice of you to offer to sell your home to your tenants. It shows a mark of a good landlord-tenant relationship, and since you’ve known them for nearly two decades, the arrangement discussed likely came out of a good place. For the buyer, there are several pros: they don’t have a minimum down payment, there are fewer regulations, and it can provide an avenue for homeownership for people without a high credit score. And for the seller? You could save …

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