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Pamela Shilling Thompson

Phone
(863) 325-8217
Fax
(863) 325-8218
E-Mail Us
Central Florida Manufactured Home Sales
Florida
LAKE WALES, FL 33859




The Thompson Team 863-325-8217

Leased vs Deeded Land Florida Manufactured Homes

Compare Leased Land vs Resident Owned/Share Owned/Co-Ops



As you reach your retirement years, typically your income is reduced from your peak earning period, and you must seriously consider methods of using your assets to your best advantage.  Whether your money is from a nest egg saved over the years, or profit from wise investments or the sale of your long-time home, is it in your best interest to tie up a substantial portion of it in the purchase of land?
Consider your options. One is to commit a large amount to the purchase of land - an arrangement whose primary beneficiary is the developer. The other is to purchase a less labor-intensive home on leased land. 

Some Agents still push land purchase, claiming land ownership frees you from additional financial obligations. However, this is not the complete story. Land ownership is an expensive way to live due to high property taxes and maintenance fees.  You will pay an additional $35,000.00 and up for a lot in a subdivision or community.  You will pay on an average $2200.00 or more in property taxes, and most likely maintenance fees on an average of $250.00 per month.  You could also be charged assessments for community improvements as needed and that could be any where from $50.00 to $1500.00 per month or more.  In addition land ownership ties up your funds - money you can utilize only by selling the land or taking out an additional mortgage (and paying substantial interest to use money that was already yours.)  In a leased land arrangement everything is included in your land lease.  The community provides the security, maintenance, recreational facilities, plus maintains all the common grounds of the community!  This leaves your hard earned retirement income in your bank account drawing interest!

In leased land communities you lease/rent the land.  The lease is renewable yearly as long as you like to renew.  The rent can only go up 2-7% yearly.  Normally, if minimum wage or social security goes up $2.00 then your lot rent goes up $2.00.  This is governed by the state therefore your lot rent can't just go up more than 7%!  Because you are on leased land you do not pay property taxes!  There are also no maintenance, assessment, or home owner fees just lot rent!  Maintenance and curb appeal of a leased land community is included in the lot rent as well as all the amenities of the community such as the clubhouses, pools, spas, libraries, billiards, tennis, golf, lakes and whatever else the individual community offers as well as neighbors sharing your ages and interests and everything is maintained and those costs paid by community management!  Continuing professional management also assures you of quality throughout the community.  Your lot rent pays for you to use the resort-quality amenities!   In some cases the lot rent also includes the cost of your trash, water and sewage bills and sometimes lawn care.   If these items are not included they are as follows.  Generally electric is about $80 per month.  Water is about $30 which includes sewer.  Insurance is about $600 per year.  Cable is about $40 per month.  Lawn maintenance $25 per month.  Trash $15 per month.    There is no difference in regular lots, canal, lake, or golf course communities other than the price per month for the view.  Generally a canal, lake view, or golf course view will be naturally a little higher than an interior lot.  A site built home in Florida has a milliage rate of 17% which is a very high tax rate for land.  This is why these communities on leased land are so popular especially for snowbirds such as you might be!  This is why 9 out of 10 people who purchase a manufactured home in Florida lease their home site!   Another big advantage to you is the community watch program of a community.  You can literally close the door and leave giving you the peace of mind that your home is being looked after and cared for when you might be away.  The 55+ and all age communities that we will show you pride themselves on this program for people just like yourselves.  Don’t forget the hugh advantage that you will not be paying property taxes anymore on your home because you are on leased land!  You also save tremendously due to the fact that you are not purchasing land.  The two of these, the cost of land and property taxes, as well as the other fees you will save adds up to money in your nest egg and/or savings that is better off held by you or invested than spending in which you need not do.  In other words, keep your money in the bank and draw interest or invest!   Polk County has the lowest cost of living index than any county in Florida!  We will show you many homes the same year, make and model priced lower than our neighboring counties, and as it says our cost of living is much lower from gas to groceries!    We are eager to work with you, so feel free to call or email your request for an appointment when you might consider a visit so we can really show you all the in's and out's of leased land communities and the many attributes leased land living will provide to you!


Resident Owned/Share Owned/Cooperative Housing Corporation (Co-Op) 

All of these are the same.  It is an alternative to leased land.  It is an alternative that may be good for some but in most cases is not.   Manufactured home communities usually own the land, utilities, and community facilities; their members own the individual  homes and use legal documents including recorded covenants as the basis for maintaining the desired controls over functioning of the community.

These types of ownership are formed when people join with each other on a democratic basis to own or control the housing and/or related community facilities in which they live. The distinction is you still don’t own the real estate.  You are buying a share.  When you buy a share you are paying for just that: a share of the community.  The average cost of a share is $30-$35,000 on top of the price of your home.  You no longer pay lot rent, but  you still pay a monthly maintenance fee which in most cases is ½ the cost of lot rent and sometimes includes things like the trash bill.  You will also incur charges to cover your proportionate share of operating and maintaining the community.  These charges can include blanket mortgage payments the community owes, property taxes, management fees, maintenance costs, insurance premiums, and utilities of the community itself, and contributions to reserve funds.  Because you would now own a share, you would also now pay a property tax bill on the share. 

This arrangement is best considered if your lifespan is expected to be a longer term you have to weigh the differences.  You need to compare the lot rent you would pay over your expected life expectancy verses the additional cost you will in tail if purchasing the share.  Another note to consider is that if you purchase a share and you finance that share, you will be paying interest on that share.  You would need down payment money that would normally be in savings earning interest.  Often times what you pay a Lender for the share will amount to what you would be paying on lot rent in the first place.  Buying into a Community share does have its benefits but again, you really have to weigh the pros and cons and every individual is different. 









Comparing A Co-Op vs A Leased Land Community
 

 Leased Land Community

Cooperative Community

Ownership:
Tenants lease the land their home sits on. 

Ownership:
The residents are shareholders in a community  that owns the property.

Monthly Cost:
Tenants pay lot rent specified in lease that sometimes includes trash, water, and sewer. Lot rent is normally more than a Co-Op maintenance payment but you pay zero property taxes and have no other financial responsible liabilities of any kind.

Monthly Cost:
Members pay the community for their monthly share of the actual operating cost, building mortgage, and real estate taxes, based on the operation of the entire community. Trash is sometimes included.  Monthly payments  are  normally lower than lot rent; however you will pay property taxes because you in essence now own a share of the land and take the responsibility for it.

Community Control:
Decisions are made thru Home Owner Associations. Maintenance and costly repairs are the responsibility of the Community owner, not you.

Community Control:
Co-op resident members elect their board of directors, which decides all policy matters. The Board usually sets up several committees to help run the community. Maintenance is the responsibility of you the share holder.

Federal Tax Benefits:
You already saved and did not pay real estate taxes of any kind in the first place!  Thereby hoping this money was saved in a savings account earning interest all along!  In some cases depending on your tax rate you can deduct the lot rent you paid.

Federal Tax Benefits:
Your share of mortgage interest and real estate taxes are deductible on your personal income tax return.

 

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Leased vs. Deeded Land

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The Thompson Team Blog
Pamela Shilling Thompson

Phone
(863) 325-8217
Fax
(863) 325-8218
Central Florida Manufactured Home Sales
Florida
LAKE WALES, FL 33859


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