Good News In Palm Springs - 7 Lakes Country Club Now Fee Land
Many of you may already be aware that Palm Springs has sections of land that are actually in Indian Lease Land. That is why you will see signs that say "Entering the Agua Caliente Tribal Lands" signs in certain areas of Palm Springs. Over the years many homes and businesses were built on lease land. You have a lease payment that basically means you are renting the land - over an above any kind of Debt service (mortgage) you may have on the property.
In recent years lease land became an issue because there was so much 100% financing that people began to shy away from lease land because of the minimum 10% down payment required. Then you also had the issue that the lease terms were coming up to less than 35 years to go on the lease. Since most lenders want you to have the life of the loan plus a 5 year pad in order to finance lease land a 34 year lease does not fit their model. So lease land was harder to finance and people had to put more money down. 2 big dings against the purchase of property located on the lease land.
Many people ask why anyone ever built or bought on lease land anyway. Well, that is easy if you look at the way things use to be a lease was for 60 or more years. The payments were typically under $100 a month . I have seen older leases with payments of $38. People knew they would never be in the property in 60 years or more so they were only too willing to go ahead and take the property. The big reason was always that you got more house for the money. See, when you did not have to factor in the price of the land up front you got a bigger house for less money. This was a big attraction to lease land.
Well, in todays economy things are changing and some of the lease that have fewer than 25 years left to go are being bought out. Not all lease land is eligible for a buyout but some are. Recently the neighborhood of 7 Lakes Country Club completed a lengthy lease purchase. Homes on average went up in value $100,000 in value. The lease purchas price was about $60,000 per home. Another great community currently working on a lease buyout is Canyon Estates in South Palm Springs.
For more information on lease land or any Real Estate issue please don't hesitate to contact Michael Layton at 760-408-5300.