Sandwich Lease

Here at Shmoop, we recommend you buy your sandwiches outright. The return policy on sandwich leases...gets kind of gross.

Actually, a sandwich lease is like a lease once removed. You aren’t leasing directly from the owner. Instead you’re leasing from an agent.

You own a beach house that you plan to lease out for the summer. However, you live in Idaho and the beach place is in South Carolina. It would be a pain to try to lease it yourself. So you lease it to an agent. They're going to pay you $2,500 a month. Then they go out and lease it themselves to the people who will actually use it. If they can collect $3,500 from the customers, they pocket the extra $1,000. You lose out on potential profit, but you're spared the hassle of finding customers and keeping up the property. You get the sure $2,500.

That situation defines the essence of the sandwich lease. You (the owner) lease it to an agent who, in turn, leases it to the final person actually using the property. The agent in this case would be the meat of the sandwich (or the PB&J, if you're a vegetarian).