Renting a land from the state or buying a property? What is more profitable?

Now the lease of land is one of the important investment directions in Russia. Owners of land in state ownership are federal and municipal authorities. Relations related to hiring land are regulated by the 22nd article of the Land Code. In addition, and in the Civil Code of the Russian Federation it is stipulated that a piece of land can be leased.

In many cases, it is more appropriate than the acquisition of land in ownership. The reasons for this may be several. Firstly, the purchase of a site is quite expensive. Lease of land from the state does not require special large investments at one time, and payments of rent are quite rational, since the use of land brings profit to the lessee.

In addition, the acquisition of land in ownership is associated with certain obligations and involvement in solving a number of problems. When concluding a lease, you can avoid spending on laying communications or other types of improvement. Interaction with state bodies is also in the competence of the owner of the allotment.

Land rent provides an opportunity for doing business in the place that best suits it. You can choose a site in accordance with your own preferences and goals. The contract can be concluded for both short and long term. If necessary, it is possible to conclude an agreement with subsequent purchase of the site.

The definition of the rate of rent is regulated by the civil legislation by the Land Code, which states that the general aspects of determining the amount of rent can be established by the Government. Also, subjects of the Russian Federation within the limits of their authority annually determine the amount of the rent, giving the local government the right to determine the raising coefficients at their own discretion.

For example, in the Moscow region, the lease of municipal land is paid as follows. The base rent is established in accordance with the law on the regional budget, additional coefficients are determined by the representative bodies of local government of a certain municipal entity.

Rent of land begins with the signing of the contract. A contract concluded for five or more years has a number of features that expand the tenant's rights. For example, the latter may transfer its rights under the contract (and duties) to a third party without coordinating with the owner of the site, but only informing him in advance of it. The transfer of rights implies the possibility of granting a sublease or gratuitous use of the allotment , transfer of rights to lease as collateral or making them as a contribution to the charter capital of companies and partnerships within the term of employment.

A feature of a long-term lease agreement is that its cancellation at the request of the lessor can be made only by a court decision and only with a gross violation of the terms of the contract. Therefore, renting land with a competent approach can be much more profitable than buying a site.