Land Leasing For Buyers

Atlas Residential Land Leasing For Buyers


Land Leasing for Buyers - Atlas Residential, LLCReal estate laws in Arizona are based heavily upon English common law where leasehold properties have been popular for many years.  Per the Arizona State Legislature, once a lease is assigned to a lessee, title to the improvements (house or other structures) is divided into two periods of time, present and future interests.

Present interest gives the lessee an “estate for years,” granting the direct right to possess and use the land (ARS 32-203.)  The future interest is the “reversion” of the property back to the lessor at the end of the lease (ARS 33-204.)  Simply put, once a land lease is assigned to a lessee, that individual has absolute rights to the house and use of the land until the end of their lease term.


Purchasing a land lease property will allow a homeowner the ability to live in, have use of, and make improvements to a house without the additional cost of purchasing the land itself.  In a period of rapidly rising real estate costs and the subsequent decline in affordable housing, this is an attractive option to get into a home that may otherwise be unaffordable.

In Metro Phoenix specifically, the median home price has climbed more than 44 percent since 2013, while the median household income has only increased by 12 percent.  This means more and more buyers are unable to look for homes in neighborhoods they would ideally like to buy in.


Currently, leasehold properties with a purchase price under $314,827 are FHA eligible.

(legal footnote)

From the Arizona State Legislature:

ARS 33-203:  Right to possession of lands; estates in possession; estates in expectancy

Estates in lands, as respects the time of enjoyment, are divided into:

  1. Estates in possession. An estate in possession is one in which the owner thereof has an immediate right to possession of the land.
  2. Estates in expectancy. An estate in expectancy is one in which the right of the owner thereof to possession of the land is not immediate, but is postponed to a future time or period.

ARS 33-204: Estates in expectancy; reversions; future estates; remainders

  1. Estates in expectancy are divided into:
  2. Reversions. A reversion is the residue of an estate left in a grantor or his heirs, or in the heirs of a testator, commencing in possession upon the determination of a particular estate granted or devised.
  3. Future estates. A future estate is an estate limited to commence in possession at a future time, either without the intervention of a precedent estate or upon the determination, by lapse of time or otherwise, of a precedent estate created at the same time. A future estate dependent upon a precedent estate is a remainder.