Why It Might Be Profitable to Sell and Lease your Home
Managing your real estate the right way is crucial in today’s market. Home owners everywhere look for mechanisms to make money out of their equity. Depending on the situation you are in, you want to go with various tools in order to fully maximise the amount of money you might be able to earn through owning a property. Among all, you have the option to sell and lease your home. In order to fully understand this statement we will look into some definitions and factors that play a role when it is time to decide what sort of action is needed.
A sale means that you are no longer the owner of the estate and that you receive cash in return. The buyer can be anyone – a citizen, a company or even the government. Once you are satisfied with the home equity you have, you can go on and sell your home. There are a few things to keep in mind however. This transaction does not address or resolve in any way your living situation. You still need to have a place to live in. Receiving a lump sum in return of ownership of your estate sounds great but your family cannot stay just anywhere. That being said, in case you own two properties then selling one of them shouldn’t be a big deal although there might be some other options to consider as well. This covers the first part of the topic we have at hand – sell and lease your home.
Now we will share a few words on what it means to be part of a lease. This is a contract which is concerned with the specifics surrounding the rental of a property. One side is the tenant of the estate and the other side is the lessor. The most important characteristic of a lease agreement is that the owner of the estate never ceases to possess it. The lessee only has the right to use or in other words inhabit the home. In return the lessee pays a lease, typically annually but it can also be month by month. There is one important obligation, though, and it is completely on the tenant. They are required to maintain the property as if they are the owner. Unlike a typical rental where the landlord is responsible for the condition of the home, during a lease the lessee is the one to take care of that. Additionally a lease is usually a contract with certain length and we don’t mean months but years instead. It is about the long-term intentions of the tenant and this is why a lease is a little bit more popular among businesses than it is among citizens.
So now that we clarified what each of the two elements of the deal represent, you probably have a pretty good general idea on what it means to sell and lease your home. This agreement will give you plenty of flexibility as it merges together a sale and a lease. If you are the seller and then become the lessee, plenty of factors will end up in your favour. First of all you will be paid in full in order for someone else to become the owner of your home. However, you will remain there as a tenant thus sparing yourself a lot of headaches related to buying a new home, closing deals, mortgages, moving and downsizing or upgrading. If you sell and lease your home you will be able to stay in your neighbourhood and won’t need to change anything lifestyle related. Instead, you will get a nice amount of cash to be allocated to renovations, savings or a retirement fund. Your only concern is related to paying your lease on time so that you do not breach the contract. Some leaseback deals allow the tenant to become an owner at the end of the lease. This is an incredibly versatile action which will basically mean that you sell your home, lease it back and then after a certain duration become owner again. This might turn out to be quite profitable in case the market conditions are favorable to you. Keep in mind that such a contract takes place over an extended period of time and that might hold risks.
Another key element is the actual nature of the contract when you are looking to sell and lease your home. The “double nature” of the transaction is specified in the contract itself. This means that the new owner understands full well and agrees for you to remain there as a tenant. You are not required to sell and only then try to persuade the other side to lease you back the home. In case you are unsure how the whole operation is supposed to go down, simply look for professional help. Every realtor you will encounter will be happy to provide you with a helping hand when it comes to a procedure known as sale and leaseback.
The final thought of this piece does not aim to contradict anything mentioned above but only presents an alternative in case it fits your needs. That is in case you are not sure or not willing to sell and lease your home but still want to make money from it. If you have your living situation sorted and have somewhere else to live then why not consider simply leasing your home. A lot of properties can be used as offices too and plenty of small and mid-size companies will look to take advantage of your offer. You will collect your payments and will have a steady stream of cash coming your way. On top of it all, you won’t have any landlord duties because the lessee will be responsible of keeping the estate intact. Of course, every decision related to your homes and equity needs to be thoroughly thought trough. There’s no blueprint to follow here as every home owner’s situation is different.