Buying a rental on leased land

[Levi McDaniel]

Looking at the MLS today and found a low priced house on a Indian reservation. Basically you get a 20 year lease but buy the structure. It’s not far off the main freeway. Thoughts as far as buying as a rental??? Interested in hearing thoughts! Thank you! Levi McDaniel

[Cara Lonsdale]

What is the land lease amount?  Does it fall in line with your budget so the property still cash flows or presents a profit?

Keep in mind, you will never be debt fee on this property.  Even with the loan paid off, you will always have that lease fee.  Alot of people don't like that.

In my experience, properties that come with a land lease always sell for much less than properties on owned land.

We have a few communities in Scottsdale, AZ that are on land lease.  You can get a home for $450K that should be selling for $650k+.  It allows people to move to an area that they may not have previously been able to.  However, the land lease presents other issues like what happens when the land lease is up?