What if Everyone sold their Homes?

Daniel Abadi

People are more and more willing to sell their houses. This increase is due to a couple of factors ranging from the lack of market supply to new job opportunities. According to data from Google Trends, the search term “sell my house” is in peak popularity. Another term on an upward trend is the term “leaseback”.

So why does everyone want to sell their homes? And what in the world is a leaseback? Well, the housing market has reached a point where there are not enough properties for rent or purchase. It is tempting to look for the number of vacant homes in the market, which according to the New York Times, is 16 million, or 1/10 American homes. Nevertheless, this statistic doesn’t provide 100% accurate data because the census includes vacation, rentals, abandoned, and foreclosed homes. By a Freddie Mac estimate, the U.S. is more than 3 million homes short of the actual demand.

So what if you want to sell your home? A lot of real estate professionals would tell you to go ahead. The market is strong, and you would get a fair return for your property. What’s that? You don’t want to move? Well, you don’t have to.

Enter: Leasebacks

Thanks to intermediaries like Sell2Rent, you can list your property uniquely for buyers who wish to buy your home as an investment property. They give you a cash offer so you can stay home as a renter, that’s it.

Why doesn’t everyone do this? According to the Federal Reserve, the U.S home equity reached a record $27.8 trillion. Translating to the average mortgage owner holding $185,000 worth of equity. Selling their property, they could free all this equity and use it as they wish. Using it to pay debts, buy another home, or go to Disneyland.

If you change your mind about moving out, you could benefit from the hypothetical increase in available properties. You could find better deals since more people are willing to sell and stay. Relocation for work is the most common reason for Americans to move out. In this fast-paced world, you never know when you could go from seller to buyer and much less where your next job offer could take you. Having no home to sell when the time comes would take some weight off your shoulders.

A growth in leaseback agreements is also beneficial for the investor, who starts receiving rent payments immediately and has the (almost) guarantee that the previous owner will take care of it. Additionally, if prices keep rising, they could sell for more than they bought. So if you’re looking to take advantage of today’s buying frenzy without leaving your home, you have leasebacks. A low-risk, on your own term, investment for some and timeless convenience for others.

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