Land lease housing?

[HAULN-SS]

Lame? Good idea for a first house?

I looked at a house yesterday that is on leased land. That is, you buy the house, and lease the land it sits on. I didnt talk to them, so I'm not sure how much time is left on the land lease, but i'd assume it's at least 50 years (obviously i'd find out before I pulled the trigger).

So, any of you real estate types have any suggestions on this? It seems like an OK deal for someone with a single income to try to get a first house. I couldnt find anything about the re-sale of them, but it seems like most places are saying if theres at least 20 years left on the land lease, then you're probably ok. I was thinking it might be like trying to re-sell a condo? Same concept anyway it seems like. Even if I sold it for the same amount I paid - at least I'd be getting SOMETHING out of it right? instead of completely throwing money away on rent. Ok..go!

[.RJ]

I dont know anything about "leased land" but on the surface it seems like an awful idea.

We've already discussed the rent vs. buy ad nauseum....

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The short answer:

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[Dave]

sounds like an extremely bad idea to me. The though of the land owner getting an itch, dying, or needing money and me not being in a situation to buy really bothers me in a big way.

[HAULN-SS]

What do you mean being in a situation to buy? You've already bought if you are in the house. I am sure the contracts have clauses in them to avoid the guy being about to say "ok, i'm sellnig the land now, get outa here"...and he can't hike rent too much either, it has to follow the CPI

[John]

Isn't that the same concept as a co-op?

[HAULN-SS]

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oh yeah..just found it online, if anyone wants to see the house. It's obviously not my dream house, but thought it might be a good start.

remember - it's so cheap because you're not buying the land

[bassmangrammy]

That sounds to cheap to me. I'd make sure you discuss that lease thing with your attorney.

[.RJ]

So... the house is $120k, how much do you have to pay for the land?

[HAULN-SS]

750/mo for the land/water/trash/mowing..would come out to less than 1500/mo total

The price is cheap, but it's a modular house. It's about right for one of those... I used to work at a dealership for them

[Dave]

What do you mean being in a situation to buy? You've already bought if you are in the house. I am sure the contracts have clauses in them to avoid the guy being about to say "ok, i'm sellnig the land now, get outa here"...and he can't hike rent too much either, it has to follow the CPI

I mean it'd be really fucked up if he found some kinda of loophole to sell it from under you and you weren't prepared to buy the land. I just don't like the idea of owning a house but not the land it sits on. Might as well get a trailer so you can roll it away if need be. It's just my opinion, take it with a grain of salt.

[HAULN-SS]

Right, I'm saying I've thought of that too - it's definately good like aaron said I think to get an attorney to check it out to make sure everything is legit and such

[Ginger]

To consider - good luck selling in the future, too.

[HAULN-SS]

Yeah, I think I'd only do it if there was a LOT of time left on the land lease too. Like, 40+ years

[bassmangrammy]

Dude... don't buy it. Even if the house didn't convey, it's going to be an issue in some form or another.

AG

[WRXtranceformed]

I don't really have any input on that kind of house purchase. It sounds shady to me, but I can't really put a finger on exactly why.

I guess a benefit is you probably don't have to pay taxes on the land, heh.

[Evan]

leased land is the same type of thing of a trailer park. 'modular housing' is one step above a trailer.

its hard to get a loan on it, and harder to sell. stay far away.

[Dave]

There's so many terms now, it's not really fair to make that broad assumption. Modular housing is a term that many use to describe actual houses which are factory built and put together in sections on site, but some still use it to describe trailers and double-wides. A pre-fabricated house is actually built just as well as one built on-site and follows the same rules of appreciation. In fact, a pre-fabbed house really has many benefits in that your build time is dramatically reduced and they often have a lot of variability built into them so you can make it "yours" using a predetermined layout.

Back to the topic... As Aaron said, there will be issues with it, nothing ever goes as easy as you think it will. And as Andrew said, you might want to think about your future sale. There's a lot of wary people out there, including myself, who would walk out the door as soon as they find out they won't own the land when they buy the house.

[Mike]

'modular housing' is one step above a trailer.

awful, awful generalization. it just means the house is prebuilt...

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and if i spent time, i could really wow you, but the hive link above is some cutting edge stuff... really great designs using really great materials. they are cheaper to build, faster to go up... why not?

[HAULN-SS]

Yeah, I'm not agaisnt modular housing. I worked for a summer selling them (made killer money too..damn, those were the days). All the ones we sold were probably just as solid and well built as any stick built. The exterior walls were 2x6 instead of 2x4 thats used on most stick built houses, fully insulated, even the interior walls to reduce noise, and had quality windows installed in them. My parents house is almost 15 years old now, and I think the only thing they've ever had to do to it was replace the shutters that faded in the sun.

This particular house I'm looking at has the garage, which you can see in the picture, which is actually wider than a normal 1 car garage, so I could put all my shit in there too. Plus, I have the option of building a long/narrow garage down the side, which would probably be good for another two cars. As I could do most of that work myself, I think the added value might help come sell time. I'm still researching.

[Mike]

i would still not buy in to this land-lease crap. the land is where the money is... not the house. so there's really no benefit IMO.