LongView is a land lase community, meaning that homeowners own their home but pay rent on the lot that their home is installed on. This model is still a little foreign to many people, who are much more familiar with Renting [an apartment] or Owning [a site built home]. Let’s look at the the pros and cons of a land lease model a little – it may be a worthy alternative to the two classic models for many people.
The first negative that comes to mind is the home lot rent payment, which can reach as high as $600 per month. This is indeed the money that the homeowner doesn’t have “something to show for”. Typical mentality in the U.S., at least prior to the Great Mortgage Collapse of the 2007-2009 was that the value of one’s house would grow dramatically, enabling the homeowner to sell the house at a huge profit at a later time, or at least to enjoy the peace of mind of having a large equity in the house. This dream has largely vanished by now and financial recovery is slow for many people who went upside down on their mortgage or had to foreclose on the houses they could never afford in the first place. Still, the mortgage payment, even on a house that was valued too high to be realistic, is often viewed as an “investment” into its equity – all good and true as long as the market holds.
However, one thing often not considered by people is the site built home property tax. For a $350,000 residential property in the Front Range areas of Weld County the property tax can range from $1,950 to $2,800 depending on the tax district. This too is the money that the homeowner has “nothing to show for”. In Boulder County, or in a city, this tax can be considerably higher but we will not put numbers of those so that we are comparing apples to apples since LongView is located in unincorporated Weld County.
Homeowner association fees are another expense in the same category, and those can range from $100 to $350 per month, depending on the neighborhood. This is also not an investment that the homeowner is able to count towards their net worth. Taking a common value of $220 / month, HOA fees would amount to $2,640 per year. Between the taxes and HOA fees this “wasted” money adds up to approximately $4,000 – $4,800. Depending on the location these costs can be lower or higher. In LongView there are no HOA fees.
A homeowner in a land lease community like LongView in Weld County generally pays $200-350 in property taxes per year, depending on the size and value of their home. For their land lease payment the homeowners get free water for watering lawns in the summer, the use of all community common grounds and basic snow removal from the roads in the winter. Further, manufactured home prices are several times lower than site built homes’, while the quality and energy efficiency of manufactured homes are in fact quite high. Often a medium size manufactured home can be purchased for $50,000 making its combined loan and land lease payment to the order of $1,100 per month – cheaper than renting an apartment, while the quality of life in a standalone home with a 20×20 ft two-car garage in a community like LongView is undoubtedly higher than in an apartment building.
The main considerations for buying into a land lease community are, therefore, the details of the lease – which may be more or less beneficial to the resident by structuring rent increases in a manageable way; the actual house cost and lot rent; and the potential difficulty in a future home sale. There definitely is some stigma related to manufactured homes and the land lease model of living. It is our hope that the information on this page will make a potential resident think through the financial options of traditional vs. land lease home ownership, consider the quality of life in a community like LongView vs. renting an apartment, and make an open minded decision on what is best for them.