I buy land, they build house, I get it in x years?

[mkraus]

Hi,

As a strong believer in the philosophy of "the only stupid question is an unasked one", here goes...

Is it possible to buy land only, strike an agreement for someone else to build on it with rights for a fixed period (eg: 20 years) at which point the land (improved or otherwise) is handed back. Is there a name to describe this process?

For example, I'd like to live on the beach when I retire in say 20 years time. I buy a vacant block on the beach now, sell a 20 year lease to currently 60 year old retirees who build on it and live there, and in 2029 when they are being wheeled into an old age home, the lease expires and the house and land is handed back to me.

Noting that land appreciates and houses depreciate, this appears to me to be reasonable, and I feel it would be attractive to older people who liked the idea of not having to pay for the land, being able to live at the beach. Obviously only for those who don't feel compelled to hand their PPOR to their offspring in their will.

Anyone looked into something like this or care to comment?

Cheers,

MK

 

[aussierogue]

Great idea

My answer to you is - anything is possible - all you need to do is draw up a contract and find a buyer!

 

[Shaneelastic]

Great Idea that.

I did a calculation however, and its a bit of rip off for whoever builds. I cant think of a circumstance where by someone would do it. Renting is better.

Anyone asked me my professional opinoin I'd say run.

 

[Mark C]

It's called lease hold, usually 99 year term not 20 year but it's up to you.

Not very common in Aust but is used in USA and Europe in much larger numbers.

I tried to put together a project where I bought a unproductive hotel, renovated it by removing walls between rooms and putting in kitchens. Zoning would only allow me to rent the rooms and not strata title so I put forward lease hold theory (effectively renting the rooms for 99 years) to sell modified hotel rooms as units.

 

[marg4000]

I think 20 years is too short a time frame for anyone to find your proposition attractive. It would be far more economical for someone to rent in the area.

You MAY be able to find someone to enter into a long term lease if you build the house.
Marg

 

[asdf]

I like where you're going with it and may appeal to some. The problem is connecting the people who have that need. You never know, there could be a retired builder out there who would be prepared to do something like this if you paid for say half.

I have always thought house swapping is the perfect way of upgrading while saving all the transaction fees yourself. Why would you pay agents, banks and legal fees everytime we participate in the property merry go round. Its a non-value add activity.

 

[blaster]

Hi,

As a strong believer in the philosophy of "the only stupid question is an unasked one", here goes...

Is it possible to buy land only, strike an agreement for someone else to build on it with rights for a fixed period (eg: 20 years) at which point the land (improved or otherwise) is handed back. Is there a name to describe this process?

For example, I'd like to live on the beach when I retire in say 20 years time. I buy a vacant block on the beach now, sell a 20 year lease to currently 60 year old retirees who build on it and live there, and in 2029 when they are being wheeled into an old age home, the lease expires and the house and land is handed back to me.

Noting that land appreciates and houses depreciate, this appears to me to be reasonable, and I feel it would be attractive to older people who liked the idea of not having to pay for the land, being able to live at the beach. Obviously only for those who don't feel compelled to hand their PPOR to their offspring in their will.

Anyone looked into something like this or care to comment?

Cheers,

MK

That's a ripper , 126 points for trying my man.
One idea , multiply their rent in the same spot x 20 yrs . Depending on a lot of factors but in some cases I reckon they'd be 10 yrs free ahead , dunno if they'd see it that way though.
Do the numbers and let us know could you , the numbers always hold the answer.

Cheers