Land Lease question. Please help.

[Eric Hathway]

I'm viewing a 3BR property tomorrow (dirt cheap at $65k) which is being sold as just the house- the land will be leased. The land lease is set at $500 a month for the next 5 years and there is a 10% cap on any increase for the following 5 years. After that, no guarantee as to the increase.

Is this normal or is that a red flag?

I would plan on renovating the property, renting it as vacation weekly rental to cover the land lease price, and also go there myself on some weekends. I would try to negotiate a longer commitment of the land lease or possible buy out, but if no commitment is reached within 3 years, I would sell the property to avoid getting stuck with the possibility of a huge lease increase at the 10 year mark.

Any thoughts? This is new to me so I'm a bit hesitant. Property listed for $65k so not much downside. I'm going with my contractor tomorrow to inspect prior to considering placing an offer.

Huge thanks!!!