Leasing means a named contract, which consists of the acquisition by one of the parties (lessee) of the right to use things in exchange for incurring benefits for the other party (lessor), which in turn acquires and gives that item to use.
The subject of real estate leasing is various types of facilities, e.g. warehouse, service, commercial, office, etc. This is the reason that the services provided by companies that deal with this type of leasing are directed primarily at the segment of medium and large enterprises. High prices appearing in relation to real estate cause that they are often clients with foreign capital or well-off domestic companies.
Real estate leasing can be carried out both in financial and operational form
In the first case, the property is owned by the lessee and he depreciates it, while in the second case the property belongs to the lessor.
In practice, operational property leasing agreements are concluded for a period of time that is not less than 40% of the amortization period and over 10 years. There are no time limits regarding the financial form.
In the case of real estate leasing, reverse leasing is a popular form. A returnable lease is a specific type of lease based on the link between the lease agreement and the previously concluded sale agreement.
This means that the party to the contract, i.e. the lessee, sells its fixed assets to the other party – the lessor (usually a leasing company). Simultaneously with the sale, these funds are not transferred in the physical sense of the buyer but remain for use with the lessee.
The entrepreneur sold the property to a leasing company
At the same time, he concluded a property lease agreement under which he still uses it. The leasing company receives monthly revenue from the property, and after the period for which the contract was concluded, sell it at a price agreed in the leasing contract in advance.
A real estate leasing solution is more beneficial for an entrepreneur than taking a loan. He has the right of first refusal and the purchase price is fixed in advance, which is independent of market conditions.
Thanks to real estate leasing, the entrepreneur regains the funds invested in it, which he can manage, allocate them for repayment of liabilities or development of business.