Can anyone explain what is "leaseback" in real estate?

Question

Is it where the seller re-own the property again after years or no?

Answer 1

The two most common forms of leaseback are:

1. Model homes in new construction.  They will sometimes sell these to investors a short time after they build it and the builder will lease it back from the buyer.  This changes the model home from an asset to a business expense, and for tax purposes, better for the builder.

2. When a seller sells a home, but the seller needs to occupy the property past the closing date.  The seller agrees to lease back the property from the buyer until the seller moves out.

In leaseback situations, they are no different than regular landlord/tenant arrangements...the seller can't get back the property from the buyer unless the buyer agrees to sell it back.

Answer 2

say you own a house and need money. I come along and buy your house, but turn around and lease it back to you. I now own the house and you stay on as my renter. Thats a leaseback. And the "deal" can be structured however both parties agree to--i can give you a chance to but the house back from me, but EVERYTHING has to be spelled out in the deal (in writing). Maybe you don't want the house back, you just don't want to move, maybe you DO want it back, maybe i don't want to sell it back, all these scenarios must be agreed to before the deal is finalized. And you need a realtor or attorney to make sure everything is legal--if you try to do it on your own, you're asking for trouble. Anyway, thats the gist of a leaseback.

and the above answer is also accurate, theirs is just more of a commercial-property answer, but the concept remains basically the same, whether an individual type (my example) or a more commercial, resort type deal (in the above example).

Answer 3

In real estate

Leaseback arrangements are popular in the United States and the United Kingdom. The seller is often a property management company, Typically the initial lease is for 9 to 11 years. The net rental yields are usually in the range 4 to 6% per annum (based on the purchase price). The properties in these arrangements may be residential units, apartment buildings, factories, resorts, or almost any other type of commercial real estate.

Leaseback of residential property has been popular in France for many years and there are significant tax advantages. Under the scheme the purchaser may own the property from 1 to 8 weeks per year.[citation needed] The French government encourages the development of leaseback schemes in tourist areas to alleviate shortages in rental accommodation. The French government rebates the local tax, called TVA, when the property is purchased. Currently the TVA rate is 19.6%. In France, a leaseback property typically has to remain in the leaseback scheme for a period of 9-11 years, depending on the specific property and program. Leaseback mortgages there must be at least 15 years for the transaction to be capital gain tax free.[citation needed]

The leaseback concept has spread to other European countries including Spain and Switzerland. Typical property available are studios, apartments and villas. They are situated in ski areas, beach resorts or golf courses.

Answer 4

Leaseback actually is an arrangement in which one party sells a property to a buyer and the buyer immediately leases the property back to the seller. This arrangement allows the initial buyer to make full use of the asset while not having capital tied up in the asset. Leasebacks sometimes provide tax benefits. also called sale and leaseback.