Many or all companies we feature compensate us. Compensation and editorial
research influence how products appear on a page.
Home Equity Home Sale-Leasebacks

How Does a Home Sale-Leaseback Work?

If you have significant equity in your home and need fast cash, a home sale-leaseback lets you access your home’s value without taking on additional debt. This option involves selling your home and then renting it back from an investor or buyer, allowing you to tap into your home’s equity while continuing to live there.

Homeowners might prefer this option because it eliminates the need to find a new home, avoiding moving and homebuying expenses. This guide explores how a home sale-leaseback works, including its benefits and drawbacks, to help you decide if it’s the right choice for you.

How does a home sale-leaseback work?

A home sale-leaseback allows you to sell your home to an investor or buyer and then lease it back for an agreed-upon term. This process provides immediate access to the cash value of your home while enabling you to continue living there as a renter. Depending on the leaseback agreement, you can stay in your home for a short period or several years. This arrangement can be beneficial for homeowners needing quick cash without the hassle of moving.

Option 1: Short-term

A short-term leaseback agreement is ideal if you plan to move soon but need more time to find your next home. This arrangement provides interim housing, giving you the flexibility to search for a new property without rushing.

For instance, a buyer might agree to rent your former home to you for a month, allowing you additional time to close on a new house. Short-term leasebacks are often arranged with independent buyers and can be negotiated directly or through a real estate agent.

Option 2: Long-term

For those who prefer to stay in their home longer, a long-term home sale-leaseback can be appealing. This option allows you to continue living in your home without the responsibilities of ownership, such as maintenance, property taxes, and homeowners insurance.

Companies offering sale-leaseback agreements often provide longer-term leases, sometimes up to 12 months, with the possibility of renewal for several years. This arrangement ensures stability and removes the financial burdens of homeownership while you remain in your familiar surroundings.

The home sale-leaseback process

The process of initiating a sale-leaseback varies depending on whether you work with an independent buyer or a company. With an independent buyer, you might negotiate the terms of the leaseback with their real estate agent before reaching the closing table. The agreement often involves details such as the lease duration, monthly rent, and any responsibilities for home maintenance.

Working with a company, here’s what the general process can look like:

  1. Provide information about your home.
  2. The company will then assess the property and make an offer.
  3. If you accept the offer, the sale proceeds, and a lease agreement is signed. The lease will outline the terms, including the duration and rent amount.

This process ensures a structured transition from homeowner to tenant, allowing you to remain in your home with a clear understanding of your new role and obligations.

Why would homeowners use a sale-leaseback?

Home sale-leasebacks can appeal to homeowners in certain instances. For instance, you could access your home’s total value and use the funds to cover a large expense, repay a debt, supplement your retirement income, or invest.

It may also be a wise choice if you’re unsure when construction will be complete on your new home and want protection against market downturns.

These agreements also have certain benefits for purchasers. The buyer benefits from potential appreciation, and a long-term lease agreement offers predictable cash flow for a fixed period. Buyers may also get certain tax advantages, such as deducting the home’s depreciation on their tax return.


If you plan to sell your home, you may be more interested in a “rent-back agreement.”

Pros and cons of home sale-leaseback

Before making a decision, consider the pros and cons.


  • Access to cash

    Working with a home sale-leaseback company could give you fast access to money to cover a large expense, build a business, and more. Close on the deal in just a few weeks.

  • Fewer homeownership costs

    You may have fewer homeownership expenses, including maintenance costs, property tax payments, and homeowners insurance payments.

  • Protection against market downturns

    If you expect your home to decrease in value, a home sale-leaseback could help you access its value before the housing market declines.

  • No pressure to move fast

    A home sale-leaseback can help alleviate the pressure to hurry because you’ll occupy your existing home for an agreed-upon term.


  • Can no longer build equity

    When you sell your home to a home sale-leaseback company, you won’t build equity as you make payments the way you do with a traditional mortgage.

  • Fees may apply

    You might pay processing fees, closing costs, and real estate commissions when you work with a home sale-leaseback company.

  • Rent may be high

    Depending on the rental market where you live, your monthly rent could be expensive. And if you want to live in your home for several years, it could increase over time. 

  • No benefit from appreciation

    Because you’ll no longer own your home, you won’t benefit if it appreciates. You can’t access your equity or sell it for a profit in the future. 

Home sale-leaseback companies

If you’re interested in a home sale-leaseback, it’s essential to work with a reputable company. Consider the companies below as you compare options. 

Note that none of the companies below have specific debt-to-income (DTI) or credit score requirements, and all three base monthly rent on the local market.

Processing fee of 4.99% of total home saleFees not disclosedProcessing fee of up to 6%
Close in as little as 4 weeksClose in as little as 10 daysClose in 30 days or less
Up to 5-year leaseCustomizable lease lengthCustomizable lease length

For more, check out our resource on the best home sale-leaseback companies.

Home sale-leaseback alternatives

If you’re interested in accessing your home equity, but a home sale-leaseback agreement doesn’t sound like the right choice, options include: 

  • Cash-out refinance: Refinance your home with a larger mortgage to access cash. When you close on the new loan, get the lump-sum difference between your old mortgage and the larger mortgage. 
  • Home equity line of credit (HELOC): A credit line secured by the home that lets you access your equity. Use it as needed, and repay over a set term. This can be helpful if you’re unsure how much you’ll need to cover an expense.
  • Home equity loan: A loan secured by the home that lets you access your equity. Unlike a HELOC, which acts as a credit line, a home equity loan is disbursed as a lump sum, and you repay it over a specific term.
  • Reverse mortgage: A home loan available to individuals over age 62, it allows the borrower to access their home equity. The loan is often repaid when the owner or owner’s heirs sell the house.