The cost of owning property today is making the leased land concept look attractive. When a small house or condo costs $300,000 dollars to purchase and $10,000 a year to maintain, paying $120,000 for a nice 12oo sq ft mobile home in a park with lots of amenities and an affordable $800 per month fee all in can seem like a no brainer.
The reality is you have purchased a depreciating asset that isn’t like renting an apartment. An apartment is covered under the landlord and tenant act. Which means that if you pay your rent and follow the rules your are protected by laws.
The owners of the park can without very little notice demand you remove your building sitting on there land. The costs to move your unit could be in excess of $10,000 and then finding a new spot to put it will have problems of it’s own. Many parks won’t let you bring in your trailer as there policy is you must purchase a new trailer from them.
So if your heart is set on this type of lifestyle you will want to ensure the following going in.
- Make sure the lease on the land is as long as possible.
- Make sure you can’t be forced to sell or move your unit without a reasonable amount of time to move it or sell it.
- Check the parks reputation, speak to current residents and see how the park management handles problems.
- Ask what the annual increase in park monthly fee’s have been in past years
- The amount of people in the age group of 55 and up is increasing rapidly so these land lease parks and rental properties are going to be in high demand. The laws of supply and demand will come into effect and the parks will be able to raise the monthly fee’s higher and higher each year.
Owning your property in the years to come will ensure a stable and predictable monthly cost for your retirement residence.