Not all real estate ownership is created equal.
One of the most misunderstood and often overlooked ownership models in Calgary real estate is the land lease property. It sounds unconventional at first, and for many buyers and investors, that unfamiliarity alone is enough to dismiss it. But understanding how land lease properties actually work can open the door to opportunities that others never consider.
In a land lease arrangement, you own the building or structure, but you lease the land underneath it from a separate landowner. That lease is often long-term, sometimes spanning decades. You still live in the home, rent it out, or sell it, but you don’t own the ground it sits on.
This distinction matters.
Because you’re not purchasing the land, land lease properties are typically priced lower than comparable freehold homes. For buyers trying to enter the Calgary market or investors looking to deploy capital more efficiently, that lower entry point can be appealing. Monthly payments are often more manageable, and upfront costs can be significantly reduced.
But this model isn’t for everyone, and it requires a clear-eyed understanding.
When you lease land, you agree to ongoing land lease payments, which can increase over time depending on the terms of the lease. You also give up control over the land itself. That means long-term value appreciation may look different from what it does with traditional freehold ownership, and resale can be more sensitive to buyer perception and lender requirements.
From an investment standpoint, land lease properties tend to attract buyers focused on cash flow, affordability, or lifestyle, rather than pure appreciation. They can work well for certain renters, downsizers, or buyers prioritizing location over land ownership. They can also make sense in markets where land scarcity pushes prices out of reach for many.
Financing is another key consideration. Some lenders have stricter criteria for land lease properties, and resale pools may be smaller. That doesn’t make them bad investments, but it does make them specialized ones.
The biggest mistake buyers make with land lease properties isn’t buying them. It’s buying them without understanding the lease terms, escalation clauses, remaining lease length, and how those factors affect future value and marketability.
Real estate isn’t about choosing the “best” ownership model. It’s about choosing the right one for your goals.
If you’re buying, selling, or investing in Calgary and you’re unsure what property type makes the most sense for your situation, land lease properties deserve a thoughtful conversation. When understood properly, they can be a strategic option. When misunderstood, they can create surprises later.
Clarity always comes before confidence, and in real estate, confidence is what leads to smart, profitable decisions.
