Can cabin on owned land be comped with cabin on leased forest service land

[Dan H.]

I am looking to make an offer on a cabin. In this market there are cabins on their own land and cabins on leased forest service land. Our local real estate agent stated that the forest service is not obligated to extend the lease which would require moving the cabin. She also said that cabins on the forest service land there cannot be rented.

I received a list of “comps” from my mortgage broker. In this list there are 5 cabins between $137 to $178 per foot (PSF). Then there are 10 cabins between $224/ft to $319/ft. There are zero cabins in the list I was provided that had PSF between $178/ft to $224/ft.

I speculated that the cheaper cabins were likely due to being on leased forest service land. The mortgage broker indicated that cabins on leased land can be a comp to cabins that own the land. This seems crazy as the risk is different, the rules of what you can do with the cabin is different, and most importantly the price difference between cabins on land they own versus forest leased land is extreme.

I am interested to get feedback from certified appraisers on whether a cabin on leased forest service land would be a comp for a cabin that includes ownership of the land.

Thanks

[Dan H.]

@Jonathan Greene and @Mike Grudzien I agree but I was hoping to hear from some certified appraisers and if they would comp leased land versus owned land in an appraisal.

Jonathan, you are guaranteed the land through the current lease period, but not guaranteed of a renewal.   It has a certain risk, but historically has been low risk.  The RE agent stated some properties on the river in the past did not get their lease extended to provide better river access.  But also what will be the cost of the new land lease?   There is no rent control on land leases.  The killer for us and why we did not look at any leased land cabin is the no renters.  The no renting alone has a big impact on value. 

The biggest indicator that they should not be comped against each other is from the market price of each.   Clearly the buyers do not value them the same.   Leased land is being sold far below building cost.  Owned land is being sold at near building cost or a bit above building above cost (this is CA mountain building costs).  

This would be like comping a SFH to a condo where you cannot rent the condo, you pay to rent the land for the condo, and you may need to move the condo unit.

I suspect my lender is mistaken.  It would make no sense.   It would lift the value of all the leased land cabins and lower the value of all owned land cabins.  

thanks