Solar Land Lease Details

[Zee09]

I have some offers for a new land lease and I got an attorney to look it over and the solar company paid the tab.

I bought this property last year and received a bunch of low $$$ offers
Got a great offer IMO last week.

Anyone else thinking about doing this?

What i was offered was a $5k signing bonus. They figure it will take 5 years to get it approved.
During the approval process I get $12,500 a year ...I get 5 years of that.

If it goes through I get $7k a year per acre. I can sell the property at any time. They pay any property tax increase over the base rate.

Renewals are every 7 years with a built in payout increase. If I end the lease everything will be put back as before.

I believe because it is located around an upper class neighborhood it will never get passed. In the meantime I get a few $$$. I told the company this as full disclosure but they seem to think they can.

Anyone else here fielding solar land lease deals

 

[Zee09]

The solar company handles and pays all legal issues that may come up.

 

[SC Maintenance]

This is Florida I presume? Just curios on where they are looking for space.

 

[Zee09]

This is Florida I presume? Just curios on where they are looking for space.

No this is in Delaware

 

[I<3oil]

#doit

 

[crashz]

I'd like to look into something similar for our land in upstate NY. Its pretty rural, but there is 20+ acres of south facing gentle sloping fields. We looked at it a number of years ago and the contracts were not nearly as generous. I'd jump at a deal like yours. Even half of those rates.

 

[Zee09]

I'd like to look into something similar for our land in upstate NY. Its pretty rural, but there is 20+ acres of south facing gentle sloping fields. We looked at it a number of years ago and the contracts were not nearly as generous. I'd jump at a deal like yours. Even half of those rates.

Thanks...most were $2500 to $3k an acre... the agent told me they are flush with cash... and they did up the bonus and the 5 year rate because they want the property.

It would be a pension I don't have now.

 

[Zee09]

This is Florida I presume? Just curios on where they are looking for space.

Good question
It got me thinking of buying property for solar use
Great road frontage and the utility has to be up to date. They will tell you upfront which utilities are and ones to avoid. I happen to have a good one.

 

[GMBoy]

You have me thinking...I have 5 acres of back pasture with plenty of Texas sunlight I do not use and would love the extra income. Can I reach out to these folks for a possible deal for myself?

 

[PandaBear]

I can see the only concern with that is if you change your mind and want to sell the land to a developer for building new homes. You are locked into not able to do it and miss out.

Or if you trashed your neighborhood and the home price nearby tanked, your lot's value would tank as well, and in the end lose the potential value.

Have you check how much your land is worth if sold to build new homes today?

 

[Zee09]

You have me thinking...I have 5 acres of back pasture with plenty of Texas sunlight I do not use and would love the extra income. Can I reach out to these folks for a possible deal for myself?

I will PM you the company's name to research or reach out too etc.
Give me a like if you want me too. Good luck

 

[SC Maintenance]

Good question
It got me thinking of buying property for solar use
Great road frontage and the utility has to be up to date. They will tell you upfront which utilities are and ones to avoid. I happen to have a good one.

Thats actually what I was thinking. You get paid to hold the appreciating asset.

The only downside I can think of is if a solar panel breaks it can leach heavy metals into the ground. As long as your covered somehow for this I assume its OK.

 

[Zee09]

I can see the only concern with that is if you change your mind and want to sell the land to a developer for building new homes. You are locked into not able to do it and miss out.

Or if you trashed your neighborhood and the home price nearby tanked, your lot's value would tank as well, and in the end lose the potential value.

Have you check how much your land is worth if sold to build new homes today?

I'm in a good position as the acerage can only have one house on it...that's the way they zoned way back in the day and it can't be rezoned.

Resale shouldn't be a problem as the buyer would get a lucrative lease deal and it would be substantial.

But I see your point

 

[RhondaHonda]

How long is the lease term? $12,500 per year to tie something up for 5 years is cheap, depending on the size of the land.

 

[Zee09]

How long is the lease term? $12,500 per year to tie something up for 5 years is cheap, depending on the size of the land.

Renewed every 7 years after the initial 5 years and the land just sits there... Making nothing now.
If it gets approved quicker the 5 years goes into the $7k an acre right away..

 

[Zee09]

Getting about $70k for free ain't bad and if it fails unload it.....i don't see much of a loss...no mortgage on it.

It amazes me that these companies just don't grab up the land themselves...

 

[SC Maintenance]

Getting about $70k for free ain't bad and if it fails unload it.....i don't see much of a loss...no mortgage on it.

It amazes me that these companies just don't grab up the land themselves...

Land does not depreciate and you cannot depreciate it on taxes.

Lease payments are 100% deductible usually.

I assume its something like this.

 

[Pew]

If the solar company goes belly up, who pays for the removal/maintenance?

 

[Zee09]

If the solar company goes belly up, who pays for the removal/maintenance?

That is in the contract as well
3 pages worth but options are listed. Either way money is set aside to return the property to its original condition

 

[Zee09]

Land does not depreciate and you cannot depreciate it on taxes.

Lease payments are 100% deductible usually.

I assume its something like this.

They also said they don't want to be in the real estate business...
Not sure what their percentage of success is