Why would developers build on leased land when you can build on land you actually own?

Location . I could build a Chick filet on leased land in a great location , or build one in a poor location that I own . Where am I going to make more money

Ground Leases are a low cost way for developers to gain rights to the land. It is less expensive in the short term than buying land. Typically lease terms are for 49 or 99 years. Also, generally you cannot finance land acquisitions using conventional financing, so you can't leverage the purchase unless you really know what you are doing.

My father leased land to a gas station about 15-20 years ago. They paid for everything and he got a modest check every month from it. Then about...2 years ago that gas station decided to pull out because it wasnt making money. Now my dad gets a gas station that he didn't spend a dime on and the former company gets to leave "free and clear" and not have to bother trying to sell the property(with the potential for it to just sit empty and continued to drain money from them). Even though my dad got a free gas station now has to try and find someone to buy the gas station (or lease again but he chose to sell). It took him about 6-12 months for it to finally sell but it sold. It turned out the previous company had bad management and was paying over double in taxes than they should've been so once my dad figured that out and got it fixed it was easy to sell.Its really is a win-win situation for most circumstances. As long as its a great location there usually isnt a problem for either side. Even if there is turn over at the end of a lease.

My uncles father purchased land all along what became the Main Street in the medium sized town of Fairfield California. Eventually he leased the lots to major corporations and local stores who built on his properties, he leased the land for 30 years. After the 30 years he owned the buildings placed on his lots. He started out life as a ditch digger and recently died with a net worth of 55 million dollars!

That is correct, it would revert back to the owner, that's what i was saying that the owner then gets an improved lot, but usually there is something worked out with the owner and the leaser. usually their is a long lease involved as well.

But you do own the land with a condo. it's still owned fee simple in perpetuity. On leased land - the building may revert back to the owner after the term is over?

why do people buy Condominiums? they do not own the building or land, just the right to change the inside, as @Matthew Paul is saying location and someone else owns it that does not want to sell and you will be improving their land with a building that they do not have to pay to have done.

Why would developers build on leased land?Why would developers build on leased land?

Back

Resources & Media

Resource Hub Bookstore Blog Guides Pro-Exclusives PRO Podcasts Pro Partnerships

Events & Training

BPCON2026 Webinars Upcoming Events Free Courses

Strategies

How to Manage Your Rental Property How to Operate a Short-Term Rental How to Passively Invest in Real Estate How to House Hack How Does the BRRRR Method Work How to Flip a House How to Invest in Commercial Real Estate How to Invest in Real Estate How to Invest in Multifamily Real Estate How to Build Wealth

Invest More Confidently

Join the real estate investing community that’s helped thousands of people achieve financial freedom.

Start Free Trial

The Podcast Investors Trust

No fluff. Just deals, strategies, and lessons from the front lines of today's market.

Listen Now

Back

Pick Markets

Market Finder PRO Picking a Market Workshop PRO Picking a Market Worksheet Top 100 Cash Flow Markets Market Insights - Sunbelt Region

Market finder

Pinpoint the best real estate market for your specific goals with expert recommendations and real-time data on appreciation, affordability, rent-to-price ratio, and more.

Pick Markets

Pro membership

Get unlimited access to tools and resources that make it easier to find, analyze, and manage deals with confidence!

Upgrade to Pro

Back

Find Deals

BiggerDeals Off-Market Deal finding PRO Real Estate Syndications Investor-Friendly Agents Find Foreclosures Community Listings (FSBO) Business Directory

NEW! Find Cash-Flowing Deals Fast

Search nationwide listings with built-in cash flow analysis.

Find Deals

Invelo - off market deals

Scale your portfolio with off-market deals.

Explore Now

Back

Calculators

Rental Property Calculator PRO Rehab Estimator PRO Rent Estimator PRO BRRRR PRO Fix & Flip PRO Short-Term Rental PRO Sell vs. Keep PRO Landlord Insurance Calculator by Steadily All Calculators

Rental property calculator

Is it a good deal? Run your numbers like a pro with this simple yet powerful calculator.

Run the Numbers

Rent estimator

Understand how much rental income you can expect based on recent reports and data for your specific property.

Run Report

Back

Manage Properties

Managing Properties 101 Find a Property Manager RentRedi Property Management Software PRO Baselane Automated Bookkeeping & Banking PRO Property Management Tools Ask a Management Question Finding Tenants Screening Tenants PRO Leases + Landlord Forms PRO Property Insurance Property Maintenance / Rehab PRO

Property management software

Manage tenants, tasks, and your entire portfolio with one simple tool.

Activate Now

Property manager finder

Find reliable property management partnerships that last.

Find a Property Manager

Back

Plans & Pricing

Pro Membership Business Membership

Try PRO for 7 days completly free

Avoid mistakes and make informed decisions with Pro.

Start Free Trial

Grow your business

Promote your business on BiggerPockets and make quality connections with the right investors.

Sign Up Now

Back

For You

Newest Unanswered My Discussions Followed Discussions Followed Categories Followed Locations Followed People

General Real Estate

General Real Estate Investing Starting Out Deal Analysis Buying & Selling Business & Marketing Landlording Property Management Reviews & Feedback

Real Estate Strategies

House Hacking BRRRR Short-Term Rentals Mid-Term Rentals Multi-Family Fix & Flip Other Strategies

Finance & Financing

Lending Creative Finance Personal Finance Taxes & Legal Issues

News & Announcements

Official Site Announcements Market Trends & Data Real Estate News & Current Events Pro Exclusive Area PRO

Events & Networking

Events & Meetups Classifieds

Back

All Books

Best Sellers Browse All New Books & Pre-Orders Bundle & Save Books for Beginners

Unlock hidden potential in every property and maximize returns

This is your creative breakthrough guide to escaping investment paralysis and unlocking hidden profit in any market.

Get Your Copy

Build a Cash-Flowing Glamping Business with High Equity Upside

Whether you're starting from scratch or expanding existing hospitality operations, learn the practical frameworks needed to capitalize on the growing demand for upscale outdoor experiences.

Learn More

Why would developers build on leased land?

Most Popular Reply