Sell your land or ground lease it? How to decide

A sale gives you cash now. A ground lease gives you income for decades while you keep the land.

In a ground lease, a tenant leases your land, usually for a long term, and builds on it at their own cost. You collect rent. At the end of the lease, the land, and often the building, comes back to you.

A ground lease tends to fit when:

• You don't need the cash right away and want steady income.
• You'd like to pass the property to your family.
• Selling would trigger a large tax bill you'd rather put off.

A sale tends to fit when:

• You want to reinvest or retire on the proceeds now.
• You'd rather not deal with a tenant for decades.
• The best buyers in your market prefer to own.

Many owners offer land both ways and let the market tell them which is stronger. Talk to your accountant before you choose, because the tax side often decides it.