Advantages of Investing in Ground Lease

Dean Britton studied real estate at the University of Wisconsin. He is the principal of AIA, a leading asset management company. In this role, Dean Britton works with investors and developers on various transactions, including involving a ground lease.

A ground lease is a form of lease agreement where a tenant leases a particular piece of land on a long-term basis. Under this arrangement, the land owner retains ownership of the property. At the same time, the tenant can make specific improvements to the property to suit their intended function and purpose.

One of the significant advantages of a ground lease is that it provides a form of financial security for the land owner. Because the land subject to ground lease is often sited in strategic locations, they are often subject to higher rent, generating more income for the land owner.

Furthermore, ground leases often come with tax advantages for the landowner. Specifically, while the landlord might be required to pay taxes on the property and rent received, a considerable amount of taxation falls on the tenant.

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