How to Calculate Ground Rent

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In some real estate markets, you may see the term "ground rent" used. This refers to the rent paid on the parcel of land on which a structure sits. You may be interested in entering this type of contract if you want to sell a house or a mobile home, but you don't want to sell the land on which the structure is located. In this case, you must calculate a figure for your ground rent and advertise this stipulation when you sell the home.

Things You'll Need

  • Tape measure
  • Calculator
  • Measure the dimensions of the land that you are going to rent using a tape measure.

  • Sketch a rough drawing of the parcel of land and write in each dimension that you measured.

  • Divide the drawing into squares, rectangles and triangles. If the lot is perfectly rectangular or square, you won't need to divide the drawing into separate shapes.

  • Calculate the area of each shape. For square and rectangles, multiply width times length. For triangles, multiply the base times the height and divide by two.

  • Add the individual areas to find the total square footage.

  • Determine an amount per square foot. You might want to check with a few local real estate agents in order to find a competitive price for your area.

  • Multiply the set amount per square foot times your square footage to calculate the ground rent. For instance, if the lot is 15,000 square feet and your set amount is 1 cent per square foot, multiply 0.01 by 15,000 to get a yearly ground rent of $150.

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References

  • Photo Credit house for sale image by itsallgood from Fotolia.com
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