With all the problems landlords are increasingly seeing, especially in certain states, I'm thinking about ways to avoid some of the hassles.

I realize that, in the long term, the places appreciate. In some areas, they go up a lot. Still, there is the hassle of dealing with tenants and the govt.

I'm a retired contractor that made a good return doing repairs on houses.

Here's the idea.

Buy fixers, mostly "C" level places. Fix the place up to a decent "C" level place. Then split the lot from the house (thanks AD Kessler and his book "A fortune at your feet").Then sell the house and lease the land under it. In many of these situations, you can get the land almost free by improving the house. Do this inside a Roth self directed IRA to lower taxes. Take the money from the sale of the house and do the next one. After a few are done, the cash flow from the land lease adds up (thanks Lonnie). Hopefully, you don't have to deal with tenants, at least as far as the house itself. It's not perfect because bad tenants can always find a way to mess things up but if you have little in the land after you sell the house the loss is reduced. As a bonus, you can do this anywhere, just hire a good crew to do the rehab if you don't want to do it.

I'm sure its my area, but the land here is worth more than any C-level house. People buy for appreciation yes, but not always on the house - people say, "Well I can always knock the house down and sell the land." And they can.

This would eliminate your depreciation benefit of owning rentals.

I'd be afraid that they would stop paying the land lease and then it would be impossible to evict them. They and their house would just live there while you didn't get paid but still had the taxes and liability insurance to pay on the land.

I've seen this done in Central Oregon where there was a new subdivision of manufactured homes and the houses were sold with a land lease. Not the same thing as a mobile home park. Those sold OK and for not much of a price reduction but I do not know how well it all worked out for the developer.

I know that in Oregon is is extremely difficult and expensive

Richard - I am a huge ADK fan. He was one of my early mentors back in the early 1990's. I have my own signed copy of that book.

AD market is SoCal. Affordability is non-existent there. You are in a much more affordable marketplace. Should you hurt the marketability of your asset by doing that split? In addition to that consideration, you would have to consider what bank is going to lend money on a house without owning the land? Perhaps maybe a place that does mobile homes, but those rates are 10-14% instead of 6.25%.

ADK is considered the Great Granddad of all gurus. He was a genius and way ahead of his time. After WWII he was wheelchair bound during a time when being disabled was like being cursed. He thrived.

Ray-N-PA,

Yes, I knew ADK back about that time as well. I also have a signed copy of his book.

He made me really think about splitting the land and the home. It's common in mobile home parks. I checked with some lenders and they are reluctant to loan if the land lease is shorter than the mortgage on the home. So I said I will just make the lease as long as the mortgage or longer. No problem.

Some people automatically think all landlords are completely greedy. That's not true. I'm a retired contractor who has done many hundreds of places for over 50 years.