Leasing – it is known to many as an inexpensive way of getting a new car. But not only cars are “leased”. Above all, leasing enables companies to rent assets without buying them against payment in installments.
Buildings, office equipment, ships, planes – there is almost nothing that does not exist as a leasing offer. According to the advertisement, investors should benefit from this. Leasing funds are intended to give investors the opportunity to participate in companies that make high profits in this lucrative field of business by “leasing” assets.
HOW DO LEASING FUNDS WORK?
The investor participates in a closed fund that invests in certain leasing objects, e.g. in an administration building or an aircraft. If the “leasing” of these objects goes well, the investor shares in the income. Since he is treated like a beneficial owner for tax purposes, his investment expenses can in principle also be offset against tax. In the meantime, however, the tax savings options have been significantly restricted.
DIFFERENT LEASING CONCEPTS
The financial lease is characterized in that the lease object is rented for a fixed long term usually fixed basic rental period. The term and rent are regularly calculated so that the leasing company recovers its investment costs. Once the tenancy has ended, the tenant often has the right to buy the property or to conclude a follow-up lease. The incalculable risk with finance leasing lies in the long-term solvency of the lessee, which is difficult to assess. If this goes into a tailspin economically, the yield is at risk.
The strategy for short-term operate leasing is fundamentally different . At most, the leasing rates are fixed for a few years. Accordingly, the leasing funds also invest in properties with a shorter lifespan, such as cars, construction machinery or containers. After the lease expires, it will be sublet at the then applicable market conditions. sParticipation in a leasing fund that works according to this concept is a real entrepreneurial and therefore very risky participation, in which fund management is of decisive importance. Several rental periods can only be achieved with a well-maintained leasing object and, at the end of the day, there may be attractive sales proceeds. In operating leasing, in addition to the lessee’s ability to pay, which can hardly be assessed, investors have additional, incalculable risks that follow from general market developments.
WHAT SHOULD BE CONSIDERED WHEN INVESTING IN A LEASING FUND?
Anyone interested in a leasing fund should be aware of the risks of such an entrepreneurial participation, which a layperson can hardly calculate. Successful entrepreneurial participation always depends on the seriousness of the initiator. This is why this person should have many years of experience and demonstrate a verifiable positive performance record, which is confirmed by a neutral body.