When looking at homes for sale you can tell if the one you are interested in is on leased land if the advertisement says something like ‘manufactured home’ or ‘leasehold interest.’ Also be aware of the word ‘association,’ which will be used to describe areas of the property that you have not explicitly purchased yourself. The price for a home on leased land will also be much lower than the average market price for other similar houses in the area. Leased-land properties are generally built close together and rarely have amenities like a private pool attached to them.
Mortgages are taken out on land for leased properties, but a monthly payment will likely be lower because the original purchase price was cheaper. A fee that you wouldn’t normally have to pay for a traditional home is a land lease fee, which will vary by property. You may also find that some leased-land properties have massive home owner’s association fees that are used to cover the upkeep and maintenance of the leased land areas.
If you are considering buying a property on land for leased it will be beneficial to come up with an outline of your budget for a regular property and for the leased-land property. When you write down the savings and additional fees for both you might find that one is a step above the other when it comes to benefits and price (and it might not be the property you think!). Be reasonable when it comes to assessing your financial goals in the purchase of property, leased-land or otherwise.
You will also want to find out from the owner or realtor how much time is left on the lease. Generally you want to look for properties with a long lease left as you won’t have to worry about the changes that will occur if the lease ends while you are still living there. If the lease is shorter you might find it difficult to get a mortgage and finance your home. If the lease is up soon and you decide to purchase the property anyways, make sure you know what you will happen to the property when the lease ends.