When in doubt, check the CCR's of the association to see if there is actually a lease.
The only positive would be the sales price, is often a lot less, to help subsidize the high lease payment.
Make sure your lender will fund a loan on a condo on leased land, as some do not.
Best of luck in your condo buying quest!
Kawain Payne, Realtor/Notary
Thanks for asking your question on trulia.
Purchasing a home in a leased land community might enable you to own a home that you otherwise wouldn't be able to afford.
However, as other people below pointed out there are a few risks involved.
How much time is left on the lease? If there is less time left than would you like to spend in your home, then that could be an issue.
Also, look into the cost of living on leased land. What are the HOA's for example?
Furthermore, you can not be guaranteed that the value of your property will increae quite as much as it would if you owned the land. In fact, you can risk losing all of your equity. For most people their home is where they invest most of their wealth. A land owned property might be a good hedge against inflation. A leased land property is not, because monthly/ annual leases might go up significantly.
You might find this article interesting:
Are you looking at a particular property?
Have a great day!
Realtor at Berkshire Hathaway Laguna Beach
949 395 0960
While the prices of land-lease homes might be enticing, you don't build the same equity in your property.
For example, there is a condo complex in North Santa Ana where units are up for sale at $90,000. However, the land lease on this property is $1000/month, with an annual increase. While the sale prices looks inviting, spending an additional $1000/month on top of your mortgage can make a big dent in your monthly budget!
You would be better off finding a place on owned-land for a slightly higher price point ($160-170k); financially, it would take about the same income and credit score to qualify for the purchase!
Please let me know if you would like any further assistance!
Nicole Fedorchek, Realtor
We lend to "leasehold" land tenure as long as time remaining on lease hold is greater than the term of the new loan by 5 yrs.
In order to get a 30 year term loan, you need at least 35 years remaining on current leasehold.
Senior Loan Consultant
All California Mortgage
A Division of APMC
P: (415) 464-8261
C: (415) 378-7508
F: (415) 464-2367
NMLS 304353 - BRE 01380701
BUT....when you add the land lease costs in you may find that you actually qualify for a more expensive condo and you will own the land... Often between the HOA's and the land lease the costs can be an extra $600 or more depending on where you buy, the complex and the lease costs...
It is best to talk to a tax person about the advantages and disadvantages...Also a realtor can help you make an educated decision....
Happy to help or answer your questions.
Keller Williams Newport Estates
Secret List of Unlisted Bank Owned, Short Sale, and other Discounted Properties throughout the Orange County area. Most of these homes are not listed on the open market with or available through any online searches. Gain free access below. http://secretocforeclosures.weebly.com/
Just send me an email if you have any further questions.