What is a Residential Sale Leaseback?

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A residential sale leaseback is a transaction in which you sell your home and then immediately lease it back from the buyer.

The concept of the sale leaseback started in commercial real estate but has started to pop up in residential homes.

What are the Pros and Cons of a Residential Sale Leaseback?

Pros:

  • You can get 100% of the cash out on the value of your home.
  • You can stay in your home.
  • You can take advantage of the tax benefits of selling a primary residence.
  • Some buyers may offer you the option to repurchase your home.

Cons:

  • You no longer own your home.
  • You no longer control your home.
  • You could get evicted if you do not pay your rent.
  • You no longer benefit from potential equity appreciation in your home.

Homeowners may consider selling their homes if they need cash but do not want to move.