We’ve been talking about sub-surface rights. Next comes surface rights. In Florida, a house is usually built on a cement slab on the surface of the land described as a lot. Sometimes it extends below the surface and into the air above the surface, but the land had to support it, or support what was supporting it. Thus, surface rights are often sold without conveying any other rights. Neither the builders nor the occupants mind much if they don’t need other rights.

As a practical matter, a lot of building are constructed on land that isn’t owned by either builder or occupant; it’s leased. The great Astor fortune was created because of land leased in New York City where many of those tall skyscrapers were built on leased land.

Speaking of leases; Harding’s diagram included a number of leases on a building: In the lease hierarchy, first comes the land upon which a building is situated. A net lease on free and clear land beneath a major building leased by a financially strong tenant is one of the safest long term investments in real estate. The tenant on a net lease pays for everything including taxes, insurance, maintenance, and improvements.

Read the rest of this entry »

Investing in real estate is more than looking for a place that you can call home. Real estate investment has become very popular for the last fifty years and a common investment tool. While the real estate market offers a lot of opportunities for making large gains, owning and buying real estate is more complicated compared to stocks and bonds investments. There are several kinds of investing in properties that you should know before you proceed in this venture.

The oldest type of property investment is buying rental properties. A person purchases a property and rent it out to tenants. The owner or the landlord takes responsibility in paying the taxes, mortgage and the maintenance costs and charges enough rent to cover all the expenses. The owner may also charge more for a monthly profit. However, the common strategy is to be patient and charge just enough until the mortgage is fully paid so majority of the rent becomes the profit. In this type of investment, there is a possibility that you could end up with a bad tenant or renter who refuses to pay or damages your property or you could also end up having no renter at all.

Another type of investment is the real estate investment groups that are small mutual funds for rental properties. A company will purchase or build apartment blocks or condominiums an allow investors to purchase them through the company. An investor may own a single or multiple units. The company who operates the investment group manages the units and takes care of the maintenance, interviewing possible tenants and advertising vacant units. The company gets a percentage of the monthly rental.

Read the rest of this entry »

Selling your property with a lease purchase agreement was probably not what you had in mind when you put the for sale sign up in the front yard, but now you have came across a serious buyer that is just not quite ready or able to close on the purchase right now. Maybe they are just waiting on the sale of their previous property in a different state or maybe they have a few things on their credit report that will be cleared up before too long.

You feel very confident they are serious about buying the property and you are considering letting them rent the house until they can close on the purchase. You have probably heard of a lease option but know that’s not exactly the type of deal you are entering into with the buyer.

You and the buyer intend to fill out a complete purchase and sale agreement with a stated deadline for closing based upon their situation. You are not simply giving them the option to purchase. They are putting down a binder deposit (also called earnest money in some parts of the country) and signing a contract agreeing to buy the property and you are agreeing to allow them to rent the property until the closing. This is called a lease purchase agreement.

Read the rest of this entry »