Leveraged Lease
Categories: Real Estate
See: Leverage. See: Lease.
Most leases are two-way arrangements. You own a house you want to rent. You find some people who want to lease it. They pay you rent; you let them live there. Pretty simple.
Leveraged leases add a third party. And before you get too excited, it's not like that one night in Vegas when you and your spouse got experimental with that woman you met at the casino bar. A leveraged lease just means that the person who ostensibly owns the property getting leased had to borrow some of the money to buy it.
So...you own a house. But to purchase it, you had to borrow the money from your parents. Some or all of the funds you collect in rent has to go to them to repay the loan. It's a leveraged lease.