Put and leaseback options are increasing in popularity as US businesses look for ways to increase their business cash. Many companies are recently purchased as operating companies with properties attached; Getting yourself off the property can give you the cash you need to expand.

As with any deal, there are pros and cons to consider and you need to decide if the pros outweigh the cons before signing on the dotted line.

Get started by looking at the benefits of sale and leaseback opportunities and how they can help move your business forward.

Of course, the main advantage of this option is that you sell your building and receive the cash, which you can use how and when you want, whether it’s to invest in other buildings, expand your business or pay off your debts.

Another advantage is that you rent the property to the new owner. This has the added benefit of a fixed rental amount being agreed for a set of several years, which is normally fifteen years or more.

On top of this, it means you don’t have to move property, confusing your customers and saving you money marketing your new information like address and phone number.

Then there’s the advantage that if you choose a put-leaseback option, you can pay off your mortgage, which is always a winning opportunity. With no mortgage payments, you can enjoy the fact that you have a fixed amount of rent that you can offset on your taxes.

This is the reason why many companies choose the sale and lease back options, since they can take advantage of the tax savings they obtain when renting.

Rent payments are tax free, adding cash to your bank balance, increasing the amount of cash in your pocket to help grow your business to the next level.

When you relinquish your ownership rights to the property, you also reduce your maintenance costs, depending on the type of sale-leaseback agreement you choose.

There are a number of options, triple net leases are generally a cheaper rental amount, but you are still responsible for all maintenance, or you can choose a slightly higher rental amount, handing maintenance responsibilities over to the new owner.

The last advantage you’ll want to consider is whether the agreement you sign gives you the ability to buy back the property after the agreed rental period. This is something to keep in mind and a huge benefit when the lease comes to an end.

Then there are the cons. While there aren’t many, you should weigh them against the advantages of selling and leasing back to decide if it’s the right option for you before moving forward.

One of the downsides you can consider is that you lose certain rights to the property when you become a tenant, this includes using the property as collateral when applying for a loan, if you ever need more cash.

Other disadvantages include that after the agreement, when it comes to signing a new rental agreement, you may not have any control over how much the rent increases.

During the lease term, you know what to expect, but when your years are up, you may need to consider moving to pay the rent.

The last disadvantage is that some agreements do not offer the ability to buy back the property from the new landlord and this is a serious consideration that may affect your business in the future.

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