Sale-leaseback is by far the most interesting way of accumulating cash without even hindering the business. In this scenario, a property owner sells the property to an external investor and leases it back quickly thereby becoming the tenant of his own property. Although this sounds strange, yet it is the best possible way of liquefying the money, as by virtue of the deal, the past landholder i.e. the present tenant can still control and utilize that same piece of land in lieu of a small amount of rent. This investment has undeniable advantages for both the party. An attractive investment, it promises a high return.
Buyer Benefits of sale lease back
The person who buys the plot or property is actually investing in it. He receives a property with an established business, a genuine tenant, and a considerable rent against a few bundles of money. TO sum up, this is a win-win situation for him.
Seller Benefits of sale lease back
The once upon a time owner who now becomes a seller gets to enjoy more profit. Here the instant ones:
- A sumptuous amount of cash for the property, which he can use to pay debts, fund growths or to invest somewhere else.
- The lease of the property for a long-term against a small capital, thereby regaining the control on his own land.
- Enjoys the asset without the liability of the ownership and value risk.
- Gets provisions for additional tax deductions.
Sale lease back is basically a low or no risk deal. A lease from other moneylenders and banks can have some added claims, which may not exist in this deal. Clearly, it aims to raise the capital while reducing the occupancy cost simultaneously. Thus, it has become a favorite of many European countries and USA although it might not be applicable to every scenario. If you also want to invest in this venture, be smart and act now.