Should you buy a home on leased land?
Investing in a home is a significant decision, and one aspect that often sparks debate is whether to buy on leased land.
“Something that I would just check is what the lease is. Is it for 15 years? Is it for 10 years? Is it for 50? Is it a hundred year lease and you are 92 into it?
And many years you have to pick up your house kind of thing, have it moved, which obviously is usually too costly. Or is it five years into a hundred a year lease, etc. It’s just handy to be honest with your lease land because then it’s kind of like a condo fee. You pay a fee and they cut your grass to do your snow, etc.”
I’m not against lease land, but that is basically what I’d say is check how far into it you are as well as if there’s any common elements like a condo and just see if there’s any like lawsuits against it.
- Thoroughly review the lease terms, including renewal options, rent escalation clauses, and any restrictions.
- Understand the long-term financial implications, factoring in potential rent increases and the impact on property value.
- Have a clear exit strategy in case you decide to sell, considering market conditions and the transferability of the lease.
Buying a home on leased land can be a viable option, especially for those seeking affordability and prime locations. However, it’s crucial to carefully weigh the pros and cons, considering your financial goals and the specific terms of the land lease. Consulting with a real estate professional can provide valuable insights tailored to your individual circumstances.