Dear Mobile Home Buyer,
Here is some information regarding your concern about paying lot rent once you buy your retirement home down here in sunny Florida.
FIRST, THE ALTERNATIVE
Buying a Share and Paying Real Estate Taxes: I want to tell you that your other option to purchasing a manufactured home on leased land is to purchase a home in a resident-owned community (ROC). The price per share is around $35,000. So, your initial outlay would be quite sizeable. Most communities of this type are filled with older homes. You would have to pay taxes on the home/land every year, because you own real property. You can pay monthly lot rent in a leased lot community with newer homes for MANY years before you reach $35k and you don’t pay any major real estate tax.
NOW, THE ADVANTAGES AND FEES FOR PURCHASING ON LOT LEASED LAND
Amenities: Paying lot rent gives you use of the community’s amenities such as clubhouse, pool, hot tub, shuffleboard, activities, and in some cases tennis courts, restaurants, golf, etc.
Sales Tax: You will pay sales tax on the home when you purchase it but you will not have to pay any annual real estate tax thereafter. In addition, you will not be liable for any major expenses to the updating of systems, equipment, roads, structures, etc. in the community should the need arise. This is unlike what could happen in a resident owned community. You could be assessed for additional fees for updates to the community if there was not enough money in the Capitol Improvement Account.
Tag Registration Fee: For a home in a leased lot community, your home is licensed annually, like a motor vehicle and has a registration and “tag” for each side of your home. If you buy a double wide home, you will have two registrations and two tags but the cost would be proportionate to the length of your home. My home is 48 feet long and it cost me $47.55 per side to register the home for 2015.
Ad Valorem Pass Thru and Fire Protection: There is a fee that park owners charge to their homeowners, which is called the ad valorem pass thru tax which is the real estate tax for the land on which your home sits. This is about $30-$35/mo. The other tax/fee that you pay once a year of around $75 is for fire protection.
About Rate Increases: A community owner can adjust the market rate of the lot rent at will; right now community owners are only increasing it annually. However, once you purchase a home in a leased lot community, your monthly lot rent can only go up a small amount– around $5-7/mo per year or CPI, whichever is greater. Some of the larger communities increase their lot rents as much as 5% per year and some of the Sun Communities offer the existing CPI lease as well as a market lease where the lot rent increase for current homeowners is in line with what the annual increase is for new buyers buying a home in a specific community. Generally speaking, the market lot rent may increase anywhere from $15-25/mo./yr.
More Information: The rates I have quoted are for very nice communities that offer lots of amenities, so you can really get into the Florida retirement lifestyle. There are also desirable, smaller communities in this area that don’t offer quite as many “extras” and the lot rent is still in the $400 range.
I suggest you log onto our web site at www.reneesresales.com to check out what Polk County has to offer. We have quite a cross section of homes available to accommodate all budgets and interests.
Please do not hesitate to contact me with any questions you have about the information I provided to you. It may seem overwhelming at first reading but I want you to have all the facts before making a decision on this major purchase. Trust me; it’s not as mind boggling and costly as it sounds. I probably have given you too much information at one time, but I want you to have all the facts and information needed to proceed with this endeavor.
Sales Agent for Renee’s Resales