Sale and leaseback agreements offer you the opportunity to sell your property and then immediately to lease it back from the buyer. This kind of real estate transaction is popular with certain kinds of business and also with owners of large commercial holiday developments.

Basically, in terms of a sale and leaseback agreement, more often than not referred to simply as a ‘leaseback,’ the owner of a property relinquishes outright ownership by selling to a buyer, and then goes on to rent the property back from that buyer. The benefit here is that the seller obtains a lump of capital from the sale, and this can be used, if the property is a commercial one, to keep the business afloat.

Holiday schemes often operate in a similar way. Potential holidaymakers buy an apartment or villa from the owners of a development. Since the buyers are likely only to need their purchase during holiday seasons, the sellers lease it back from the new owners to other clients for most of the year.

While the seller benefits in this kind of agreement by getting a chunk of capital, the buyer will receive regular rental payments, potentially over a long period of time. In the world of commercial property, these sales are often conducted on the basis of a triple-net lease, which means that the tenant takes full responsibility for the maintenance of their rented property, paying for everything from utilities bills to insurance.

In short, leaseback agreements allow property sellers to continue to occupy their space and to pay rent to the buyers. There are benefits for parties on both sides of the agreement, although clearly, if the lease is a long one, the buyers are likely to take in more capital than the sellers.