Selling a Leaseback to Investors- the new good deal?

Daniel Abadi

When I think of an Investor I think of someone who wants to get a good deal, someone who sees an opportunity that they can capitalize on. The overall impression is this category of buyers are looking to acquire property at a discount from the market price. While the purchase price is dependent upon the condition of your home, the size and the age, there may be some hidden value that has not been considered till now.

Leaseback, a new method for selling a house,  is unlocking that value for investors.   

Investors are mainly focused on the dollars (Visit Zelltor.Com) – cash flow, return on their investment and appreciation. When searching for a desirable rental property, aspects such as location, rental rates and property expenses are determining factors. 

A homeowner is now able to sell their house and then rent it back from the investor that buys it.  From an investment standpoint, it reduces the initial capital expenditures for the new buyer.  By keeping the homeowner as a renter, the investor is able to defer many improvements or upgrades until they move out which may be a few years away.  Where permitted,  the Seller may be able to arrange prepaid rent from the sale proceeds.  The investor has the advantage of cash flow from day one. They won’t have the downtime usually required to make the home ready or loss of income during the marketing time while they find the right tenant. The right one is already home. 

For a homeowner Selling during Covid , where to move is the next question. For an Investor the question is how long will it take to find a qualified renter in these uncertain times. A Leaseback is an innovative way to unlock overlooked value for an Investor by eliminating the time wasted waiting for the cash to flow. After all, time is money.

By: Arlyne Cassuto

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