Renting a land from the state or buying into a property? What is more profitable?
Now the lease of land is one of the importantinvestment directions in Russia. Owners of land in state ownership are federal and municipal authorities. The relations connected with 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 moreexpedient 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 ownershipis associated with certain obligations and involvement in solving a number of problems. When concluding a lease, you can avoid spending on building communications or other types of improvement. Interaction with government agencies is also in the competence of the owner of the allotment.
Rent of land gives an opportunity for doing businessin the place that suits him best. 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 rental rate is regulated bycivil 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 framework of their authorities, annually determine the amount of rent payable, giving local governments the right to determine raising coefficients at their own discretion.
For example, in the Moscow region rentmunicipal land is paid as follows. The base rent is established in accordance with the law on the regional budget, additional coefficients are determined by 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 obligations) to a third party, without coordinating with the owner of the site, but only in advance notifying him of this. The transfer of rights implies the possibility of granting the allotment for sublease or gratuitous use, transferring rights to lease as collateral, or introducing them as a contribution to the charter capital of companies and partnerships within the term of employment.
A feature of the long-term lease agreementis 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.