Many real estate analysts believe that sell and rent back is a better option to home reversion plans. Home reversion plan is an opportunity for older homeowners to raise capital without shifting from their homes. In simpler language, it means selling wholly or partially your home in exchange for a capital sum and/or income. The widely used arrangement is to sell a part of your property for a lump sum.

The methods of releasing equity such as 'sell rent back' and 'home reversion plans'. But sell rent back formula has some negatives. You can't access most of the value locked in your home through a home reversion plan if you need it. For instance, for a 50% share of a house's current value, the home reversion company gets 50% of the proceeds when the property is finally sold. Then there are all sorts of other miscellaneous charges to be met. This plan is ideally suited for some senior citizens who have very few years left to live.

Some market experts opine that trading in for a smaller or cheaper property makes better financial sense - although most homeowners will be reluctant to give up their old homes. Here the emotions of the homeowners play a tremendous part and invariably clouds all reasoning and judgment.

A still better alternative to home reversion plans are offered by property companies. Like home reversion schemes, with a sell and rent back scheme you technically become a tenant but can stay in the same house. The fundamental difference is that with a home reversion plan you can normally continue to live in your home rent-free or, pay a nominal rent. With a sell and rent back scheme you have to set aside a portion of the capital sum received as rent. However releasing equity through a sell and rent back scheme will understandably result in a higher initial payout.

One reason why sell and rent back services are becoming very popular is because people are facing credit crunch and struggling to pay back current bills and mortgages. The only other similar method to release equity is a home reversion plan, the major advantage that the sell and rent back service has over the home reversion is that you can release up to 3 times more equity.

It is to be understood that sell and rent back plans is specifically oriented towards your needs. Sell and rent back is a better alternative to home reversion plans if you can foresee a time when you will want to move home. If you identify a sell and rent back provider who is willing to share the proceeds of your property with you on its re-sale - then you reclaim part of the equity you may have lost on the initial sale. Much will depend on your present circumstances and the flexible attitude of the sell and rent back provider to customize a plan to your requirements.

One of the most appealing features to a sell and rent back service is that there are no setup costs whereas with most other methods to release equity in your home, you have to pay an initial cost which discourages people. If you finally decide that a sell and rent back option is the right one for you, then you must research the various companies that offer this service in order to get the best.