Home Equity

Is a Sale-Leaseback Right for You?

By Tom Burchnell

The idea of renting your own home may seem counter-intuitive at first glance. The house is already yours, so why in the world would you want to go from owning to renting? What could you possibly get out of a sale-leaseback?

For many people, going from owning a home to renting can have many benefits. We’ll take a look at some of the ways a sale-leaseback has helped those who choose to use it.

Asset Liquidity

Selling your home and then renting it back is a way to liquidate your home equity without having to change your lifestyle. It converts your equity to cash without the drawbacks that normally come with selling your home.

If money is hard to come by due to job loss or other unforeseen circumstances, a sale-leaseback can help you get back on your feet. The money you receive from the sale of your home can help you pay bills, pay off credit cards or student loans, or it can provide the capital you need to make the investment of a lifetime or start your own business.

A residential sale-leaseback also has the potential to help bolster retirement funds. While reverse mortgages are pushed on retirees through TV advertisements, residential sale-leaseback may be a more lucrative option for many retirees.

Whatever you decide to use the money for, it converts the equity you worked so hard to build into the cash you need.

Offers Stepping Stone to New Home Purchase

Buying a new home can be daunting. Say you need to put your home on the market and it sells the next day. Where will you go? In many cases, people are forced to find temporary housing and put their belongings in storage, which can be time-consuming and expensive.

With a sale-leaseback, you can stay in your current home as a renter while you find your next home. You won’t have to worry about settling for a house you don’t love to make in order to ensure you have a roof over your head.

You Don’t Have to Move

Moving is never an easy or smooth process. It’s a lot of time and energy, it’s expensive, and can feel incredibly competitive to find and secure the right place.

If you have decided that it’s time to sell your home, a residential sale-leaseback agreement would mean that you don’t have to move. There’s no need for your life to get shaken up, which is especially important if you have children.

These sale-leaseback benefits are obviously dependent upon your situation. If you don’t have need of any of the benefits, they’re obviously not benefits.

Sell With the Market, Not Your Circumstances

The real estate market is booming! However, that won’t always be the case. A sale-leaseback agreement will allow you to unload your home in peak market conditions, even if you’re not ready to move. Then you can turn around and buy at your leisure when prices are lower.

Sale-Leaseback: Is It Right for You?

With homeownership being something so many people strive for, a goal to be accomplished, it can be difficult to understand why anyone would want to rent the home they already own. There are plenty of instances where it’s not only a viable option, but preferable to continuing to pay a mortgage payment. Our Sell & Stay program is a great and flexible sale-leaseback, that allows you to buy back or move at any time. 

Key Takeaways

While going from a homeowner to a renter may sound like a questionable decision, there are plenty of reasons why someone would benefit from this decision. If you think a sale-leaseback might be the answer you’re looking for, speak with a financial advisor to make sure you know what to expect.

Home Equity
Tom Burchnell
Written by Tom Burchnell
Director of Product Marketing

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.