Real estate sale lease back is increasing the popularity of businesses throughout the world. It’s an opportunity to free up much-needed capital, save on tax and low maintenance costs. At the same time it enables you to stay in the same property, paying a rental amount to the new owner for an agreed time.
While this is a fantastic option for companies to get their hands on cash that they need, there are important factors which is taken into consideration before making any final decisions.
This is a big decision, it leaves you without your biggest asset – your building, so don’t make this decision in haste, rather take your time, go through the steps and decide how it can benefit your company moving forward.
The biggest decision you are going to have to make is choosing an experienced real estate sale lease back advisor. It’s imperative that you take your time, do your research and choose an advisor who has years of experience in this industry.
They are able to recommend you on the options available and help you decide the advantages and disadvantages of going ahead with a deal.
Be aware if they try to force you into an agreement. An advisor should have your best interests in mind and go through the process with you, helping you decide whether this is the best choice for your company moving forward.
Next make sure you are aware of your property value. Whether you’re purchasing an operating business that came with the property or you’re looking to free up some cash for expansion, having an idea on your property worth can help you decide on whether the offer put on the table is a good deal.
In most instances real estate sale lease back agents or companies will give you a good market share price for your property.
Length of lease is exceptionally important. If you have been in the same property for years and built up a solid customer base, then you don’t want to forced out in the next few years, at the same time you don’t want your rental amount to rise exponentially when you get forced to try to renew your lease.
Ensure you get offered at least fifteen years rental, enabling you to make sure you won’t be in a difficult situation where you have to move or be out-of-pocket anytime soon.
Take the time to work out all your debts. After the downfall in the economy a few years ago, many companies are still trying to get back on track. You may have built up an overwhelming amount of debt and see no other choice than a real estate sale lease back option.
Remember you will be given a lump sum of cash worth the property value to use as you need, this is to pay off your mortgage and other debts, still leaving you with some cash for expansion or operational costs.
With your debts worked out and decide how much cash you can expect to receive and then working out the rental amount over the agreed period, you can decide if this real estate sale lease back solution is a winning option for your business.
Knowing how your company can benefit from the cash is often the sign that this is the right choice, especially if you are looking at expanding your business into different avenues.
The last step in a real estate sale lease back agreement is to ask how long the process takes and sign on the dotted line, receiving the cash you need to help your business grow for the future.