Investing in Ground Rent?

4 Replies

I live near Baltimore and I'm wondering if anyone knows how someone can buy leased land and if it's worth the hassle. To be clear, I don't mean the land under my property but to be the landlord and receive ground rent as a passive income stream.

Yes ground rents do trade but they are somewhat of an underground market.  You can look up owners of ground rent for a specific property on SDAT.  MD ground rents must be registered on that site. 

The return on ground rents is pretty modest, 6-12%. The problem is the amount of time billing for such a small amount of money, $60 or so, every six months. If you can negotiate to buy them at a discount, then they become more worth while. I own a few and don't even bother sending out the bills.

Commercial ground leases are a different  story, but they would probably be even harder to find.

Ned, thank you for all the information. It's definitely helpful. I also enjoyed poking around your website and I'm sure it won't be the last time.

So if the payment is about $120 a year, does that mean that the market value to purchase would be around $2000? Is that a typical price? I doubt I'll be interested in such small sums but it's good to have the information.

@Lisa Hines

The answer to your question, after a year, is yes. $120 divided by .06 = $2000.

I use to own several hundred ground rents and i auctioned them off. I actually got more than I expected for them. I still have some left if anyone wants them. The usual purchase price range is 9 to 15%.

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