1.Why are there so many properties on leased land?
Here are several situations. Commercial and commercial land is often rented all over the world. In New York City, Tokyo, and other larger and older cities; land owners often lease the land below those skyscrapers, and in some cases even park land is leased from the city by the land owners.
In Lewes, all the land east of the Lewes and Rehoboth Channel, known as Lewes Beach; It is leased land. Land leases there are usually owned by the Town of Lewes and are usually for 99 years and renewable. Some of the properties in Lewes Beach, however, are rented for shorter terms by the city, but as a general rule, all of them are automatically renewable. When you buy property in Lewes Beach, you pay a fee to have the leased land reassigned to you. That fee for a bayfront property on the Delaware Bay; it can be more than half a million dollars, depending on the size of the lot; and the value of the home and improvements is added to the assignment value of the lease. In other words, even if it is leased land in Lewes Beach; The price is commensurate with the purchase of the land. This land has always been leased land as prescribed by England, during our American Colonial Period and that style of ownership remains.
In the Rehoboth and Dewey Beach areas is the Rehoboth By The Sea area, a large number of lots are owned by the family owned Rehoboth By The Sea Realty Company. The current treasurer of Rehoboth By The Sea Realty Company is Jack Redefer; 302-227-4277. Land is leased to owner-tenants for shorter periods of years; some leases have as few as 20 years remaining on the lease. These leases may or may not be renewed and the value of the land, if allowed to be purchased by the resident at a later date, could be significant. As a result, these leased land properties cost much less money than owned lots. Some of the lots were purchased from Rehoboth By The Sea Realty Company in the past and are owned by residents; most have not been purchased. Rehoboth By The Sea Realty Company may not renew some leases, some may, it’s up to them. On lots for which they do not renew leases, residents must remove the improvements and leave the lot in its original grade and unimproved condition at the end of the lease. The good news is that you can save up to half a million dollars when you buy a home on some of these lots. The bad news, of course, is that you may need to retire the house and vacate the lot in a couple of decades or so.
Long Neck and other areas where trailers, manufactured, single-width, and double-wide homes are also made up primarily of leased land. There is some leased land along Rt. One, where trailer parks now sometimes contain larger, more conventional homes as well. These land lease communities are much less expensive to purchase. Little or no appreciation in value or, in some cases, the value of a property purchased in these leasehold communities can depreciate much less than the purchase price. There is also a monthly or yearly lease fee to pay for the use of the land.
2. Why would someone buy a mobile home or manufactured home on leased land?
There are many, including real estate agents, who wonder why in the world would anyone buy a mobile home on leased land. In reality, many of the people who live in the leasehold communities are well off, even wealthy in some cases, many of whom are real estate agents.
Security is one of the reasons. Many of the people in land-leasing communities, which some might call trailer parks, are retired or part-time residents. There are many who prefer security services that are only available in manufactured home communities. Most of these communities have community centers, neighborhood watches, security patrols, and alert neighbors who police the community much better than the police in a town or city.
Low maintenance is another reason why people, in fact most people, live in land lease communities. The lots are usually quite small, and each lot is often maintained by the park owner. When the individual needs to maintain his individual lot, the expense of mowing is minimal. The fee for mowing, edging and trimming can be as little as $8 each time, as the mower can often take care of a lot in less than ten minutes and if you have multiple lots in the same community you can do 5 or 6 batches per hour with a hand mower and weed mulcher. Some people do fabulous landscaping jobs on their community land lease lots. In fact, some communities hold annual or seasonal competitions to choose the best-kept, most beautiful, or most improved landscape. Many of these lots are only 50 feet by 100 feet, sometimes less, so much can be beautified with limited expense compared to the much larger lots one must have in a non-leasing community.
3. Are houses on leased land a good investment?
Very rarely are houses on leased land a good financial investment. There are exceptions. Houses on leased land in Lewes Beach are just as good a financial investment as houses on what are called deeded land in the town of Lewes proper. In fact, because Lewes Beach is more desirable to more people, prices are higher and the appreciation rate in Lewes Beach is, in the long run, better than in Lewes proper. The town of Lewes, apart from the beach, has more of a Williamsburg flavor in architecture, atmosphere and character. Lewes Beach, on the other hand, is less traditional in its architectural character. The town of Lewes is very much a walking and shopping town with shops, boutiques and small shops along Market Street, Second Street and Pilottown Road especially. The beach has very little commercial activity and is much more of a beach bedroom community where the focus is of course the beach, canal and bay.
Houses, manufactured homes or stick houses in the other land lease communities are not usually a good financial investment. However, they can be the best lifestyle investment. Many people have other real estate, other investments, and don’t need the home they own in a land lease community to appreciate in value. And, homes in land lease communities are a small fraction of the purchase price they would be if the land were deeded, on installment.
For example, a waterfront home on Rehoboth Bay at the Rehoboth Bay Mobile Home Community; now known simply as Rehoboth Bay Community; It can cost as little as $115,000, for a beautiful, modern, double-wide, full-time home. Land rent would then be $400 a month on a lagoon to $500, up to $750 a month or more on the biggest and best bayfront lots. Compared to a home on the same size deeded lot, that’s a savings of over a million dollars! So as a lifestyle investment it is phenomenal and astute buyers rarely allow these homes to stay on the market.
Other areas, for example, the Angola area, have resale homes from $10,000 for a small upper repair on a small leased lot to $270 per month for new homes on much larger lots, large homes, for $70,000 to $ 90,000 on lots that rent for less than $300 per month. A double size corner lot rents for $400 a month and you could have a many room house with decks, porches, garage and still room to spare. Angola Beach Estates and Angola Beach and Angola Estates are well established communities with swimming pools, security, substantial community management and much more. They have community centers, boat slips, launch ramps, boat storage areas, and a list of amenities not available in many other communities.
What values range: $10,000 to $80,000 resales and $40,000 to $80,000 new homes or $90,000 for a true show stopping extravagance. Now you know why people are so willing to buy and live in land lease communities! You get a wonderful lifestyle for much less than you can buy something remotely similar where you don’t lease or rent the land.
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