Thread: Which Is Better? For Sale By Owner or Lease Purchase Agreement

Hi all,

I need some advice on what is best for my situation here. We live in Arkansas. I have a property with a mortgage on it of--for simplicity sake--$50,000. I have a monthly payment of $500 with 15 years left on my mortgage. I've rented it for 5 years now. This is the background and now, things have changed.

We're retiring and can't sell the property in this economy. I also don't want to go through the constant hassle of getting a renter, cleaning the place, and re-renting, etc. as we'll be traveling and/or out of state. It's a lower-end rental and clients aren't ideal with care and timeliness of rent and at times, I've had to evict. So, can't sell and don't want to rent.

With all that's going on, we're looking into either for sale by owner (FSBO) or lease purchase agreement (LPA). We have a couple that wants to buy the place and we've tentatively discussed $150 over my current mortgage for $625/month. At the end of MY 15 year mortgage, they'd get the home in some fashion or another. As retirees and being naive, we see the $150 for the next 15 years as additional income. So, can someone please offer solid advice on which option, FSBO or LPA is best for us overall. The more details, the better. Consider:

1. Taxes. We have 5 years of depreciation as it was/is a rent now. We want our yearly income to be low and with the best tax advantages as (retiring).
2. In LPA, is a quit claim deed at the end an option?
3. What's best for capital gains?
4. Got a simple scenario to explain differences.

I appreciate any advice. Thank you,

Monty

Edit: Very sorry moderators. I think I posted in the wrong area. I'm not used to forums. Can you move this to the correct place?