Property on leased land

[Sherise Seecharan]

Hi, I am a first time investor and have been looking at the option of purchasing a vacation home on leased land. I believe it would be cash flow positive because of the location, however I am concerned about the long term equity of the property. Has anyone done this? And what would be your advise on it?

[Melissa Bovee]

I considered purchasing a cabin on land owned by the forest service. The downside is that there were restrictions on what types of improvements could be made and what materials could be used. Also the lease was up for renewal every 20 years or so. Numbers looked great for a STR, but my RE agent said they are hard to sell and always sit for a long time on the market. She said it seems risky to own since they could end the cabin program or change the rules. I bought a condo instead.