What is a land lease? An arrangement where the buyer owns the home but rents the land under it on a long-term lease, so the purchase price buys a building and a countdown rather than a piece of ground.
On leased land the improvement and the dirt have different owners. The buyer takes title to the house or the manufactured home, and the ground stays with a landowner who collects rent under a lease that is normally recorded and normally long. It turns up in manufactured home communities, in some resort, golf and beach developments, on tribal land, and under a scattering of condominium and apartment buildings in older cities. A ground lease is the same instrument under a commercial building.
Three numbers describe one. The term, commonly written for anything from 30 to 99 years. The rent, with an escalation clause stating how it moves, often a fixed percentage every few years or an index adjustment, sometimes a full revaluation at set intervals. And the years remaining, which is the one that prices the home: as the lease runs down the buyer is purchasing fewer remaining years, values soften well before expiry, and lenders generally want the lease to outlast the loan by a margin, so a lease with 25 years left will not support a 30-year mortgage. At expiry the land and, unless the lease says otherwise, the improvements go back to the landowner.
This is not the same as lot rent, which is a month-to-month or short park tenancy governed in Nevada by NRS chapter 118B and its 90-day notice for rent increases, and it is not a fee simple purchase, where the price buys the land outright. A buyer looking at leased land should read the lease itself rather than the listing: remaining term, escalation, what the rent resets to and when, what happens at expiry, whether the lease can be assigned to the next buyer, and whether any lender will lend against it.
A worked example
A home in a leased-land community sells at $240,000 with 41 years left on a 75-year ground lease. Ground rent is $480 a month with a 3 percent escalation every third year, so it is about $525 in year seven and about $645 in year sixteen. A lender wanting the lease to outlast the loan by a decade will write a 30-year mortgage today and, with 22 years left, will not.
What a mobile home costs in Las Vegas
Questions people ask
Is a land lease the same as lot rent?
No. Lot rent is a park tenancy, month to month or on a short agreement, governed in Nevada by NRS chapter 118B with its own 90-day notice rule for increases. A land lease is a long recorded lease, often 30 to 99 years, with a stated escalation and a fixed expiry, and the remaining term is part of what the home is worth.
What happens when a land lease expires?
The land reverts to the landowner, and unless the lease says otherwise so does whatever is built on it. In practice leases are usually renegotiated or extended long before that, but the price of an extension is the landowner's to name, which is why the remaining term shows up in appraisals decades ahead of expiry.