Have you heard the term “Leased Land Development” lately? You’re not alone! This model offers buyers the opportunity to enter the housing market without the additional costs of purchasing the land.
Land lease concepts have been around for decades, particularly in the United States and Europe, however, the model is slowly becoming increasingly popular in Canada. While a little unconventional, it’s a structure that’s proven beneficial for both parties; landowners and home buyers.
As traditional new builds become less attainable due to inflation, leased land communities allow landowners to sell houses to buyers at a lower price than a conventional home on the market where the buyers must also pay for the land, land transfer, property taxes, and interest on that portion of their loan payment. This offers buyers a more affordable route to home ownership while continuing to maintain and build equity on their investment.
Homeowners pay a monthly lot rent, similar to a condo corporation structure, which helps offset development costs, land tax, management, and common area maintenance.
Those who reside in leased land communities appreciate the comfort and peace of mind that their community esthetic and investment won’t be compromised as leased land developments typically have bylaws in place that help uphold the value of the homes and maintain the quality of the community. These bylaws are more lenient than those of a condo corporation, giving homeowners the ability and freedom to enjoy their outdoor space while offering added protection of their property value and enjoyment.
If someone in the market is looking for the benefits that a condo corp offers, but would prefer the space, privacy, and freedom of a single-family home, a leased land development might be the perfect solution!