Neighbor wants to sublease property behind lot - thoughts/advice?

6 Replies

To make a long story short, I have a couple of acres behind one of my properties. I take mediocre care of it because - well- why do more than the minimum. Its behind a tree line and stuff so my renters don't even know it exists.

A neighbor expressed concern that they would like it to look nicer and expressed interest in this land as a long term lease. They can use it and care for it, and then I don't have to care for it or worry about it. I checked with insurance, checked with my loan note, and checked with the county zoning. No issues on any of those fronts.

So their agent said, "name your price and we'll talk".

I don't know where to start! How much to charge for something like this? How long should the lease be? what should I spell out on requirements? 

I know I won't be getting much for it, but not caring for it is a plus too. Their agent suggested "Maybe a low dollar 99 year lease", but that they will discuss pricing.

I was thinking of keeping it short to make sure I can move the property if I need to, like a 10 year lease? 

Then I didn't know if it was appropriate to charge $1 for 10 years or if asking for like $250/yr per acre was reasonable.

Anyway, it seems extra challenging BECAUSE there's no real money in it and because its pretty flippant. Is there anything I should be concerned with? And what should I charge?

Is it possible to sub divide and sell it to the neighbour. Is there any possibility of future development from behind the existing section.

Keep in mind you will be selling this property in the future.

Originally posted by @Thomas S. :

Is it possible to sub divide and sell it to the neighbour. Is there any possibility of future development from behind the existing section.

Keep in mind you will be selling this property in the future.

 I can't sell it because of weird zoning issues where this is. There's acreage limitations to preserve the zoning situation that I'm in, and if I go below 5 acres then I can only be single family residential. that doesn't mean I need the land for any other reason than to preserve zoning.

Throw out a high, but reasonable, number and see how they react. You might be surprised what's It's worth to them. At least try to cover your cost (time and money) to maintain it. For the lease I'd do short term only; a year at the most, renew it if needed. Especially if you plan on selling the property in the future, you don't want have it tied up with a long lease. It will be less appealing to the buyer. 

Ken Konecny, Broker in CA (#01922442)
Originally posted by @Ken Konecny :

Throw out a high, but reasonable, number and see how they react. You might be surprised what's It's worth to them. At least try to cover your cost (time and money) to maintain it. For the lease I'd do short term only; a year at the most, renew it if needed. Especially if you plan on selling the property in the future, you don't want have it tied up with a long lease. It will be less appealing to the buyer. 

 I did a 1 dollar lease, but kept it at a year per your thoughts. I appreciate it!

Is there growth occurring in your area? Have you been attending County Council meetings, is there a growth plan that you can review? My residence is also on 5 acre minimum parcels, but with the growth that is occurring in my area, I anticipate the zoning will be changing. Higher density housing will be going in. You should also look at the taxes you pay on the land and the value of the timber on the land you are leasing out. Will your lease allowing logging? You may end up with a piece of logged out land that is worth considerably less than what you have now.

@Brooks F. You're welcome!

Ken Konecny, Broker in CA (#01922442)

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