Homes on leased land are almost totally unlike all other real estate purchases. Rather than buying a house and the patch of land it rests on, you buy only the house, and the land is actually owned by someone else. This of course comes with both benefits and drawbacks. To help you decide if this arrangement is right for you, read through this list of the pros and cons of buying a house on leased land.



Houses on Leased Land Are Cheaper than Traditional Homes

Due to not having to buy the land the house is on, homes under the leased land system are often cheaper than their traditional counterparts in terms of sale price. This makes it possible to live in an area that would might otherwise be too expensive.

Little to No Property Tax

Since you don’t own the land, property tax will be minimal, even nonexistent. This compounds with the fact that houses on leased land are much cheaper than what they’d be otherwise. This makes living in an area that would normally be far too expensive for your budget become a real possibility. 

HOA Benefits 

Many Home Owners’ Associations not only set and enforce regulations for the neighborhood in which they operate, but in leased land neighborhoods, where they have an even heavier presence, they often provide services such as lawn mowing, landscaping matters and maintaining facilities.


Getting Financing is Difficult 

Due to the nature of leased land homes and how little value they generate and retain, you’re probably going to have some serious trouble finding someone to give you a loan for a leased-land property. This is partially caused by the fact that the land lease can in fact expire, and once the lease is finished, the landowner can either keep the land for themselves or even charge more than the previous rate.

Many Recurring Fees

While the sale price of the house may be lower than the expected value of a traditional house of the same size/style/area, there are still costs associated with living on the land that your home sits on. Though you may be able to get a bigger house in an area you wouldn’t normally be able to afford, the lease payments are typically expensive, and the Home Owners’ Association also need funding.

All this, and depending on the surrender clause, you might have to leave when the lease expires. 

Let me help you navigate the best way to purchase a home on leased land. Connect with me today to learn more.