Source: realtor.com
|
Traditionally when someone purchases a home they are buying both the house and the land it is built on. A Land Lease, also known as a Ground Lease, is another form of home ownership which allows someone to purchase or build property in land that he/she could not afford to purchase. This tool is typically used by large chain stores like Whole Foods and Starbucks to build on well-located land that otherwise could not be bought. As an affordable housing tool, a land lease can create two sets of owners, an owner of the land and a separate owner of the physical house that sits on the land. This distinction gives the land owner various affordability controls they can use to govern the development of the land for residential purposes over a timeframe that can stretch from long-term to permanent affordability. And, because a ground lease does not require the tenant to have a down payment for securing the land, as purchasing property would require, a tenant would make significantly lower monthly payments because the overall price of the home will be lower. In fact, this tool is pivotal to the community land trust model: more and more local public agencies are leasing land to private entities for the development and/or operation of large-scale affordable housing rental units.
|
|
|
|
|
How much does a family pay?
For example, a three-bedroom, 2 bathrooms, 1,600 square foot home is going for around $500,000. To compare it to a land leased home, it may cost only $150,000. On top of that there will also be a land lease fee.
|
Who qualifies?
Anyone with good credit and the means to take out a mortgage may purchase a land leased property.
|
How many units?
Usually land lease properties are part of an entire community of homes.
|
