SongBrook LLC will never arbitrarily increase your rent. It is written in your 25 year lease agreement.
Adjustments to rent at SongBrook are tied to three items, and three items only:
2. Property Taxes & Other Governmental Charges
3. Lease Agreement Renewals
Since 1994 when homes were first built at SongBrook, the CPI for all urban consumers has increased at a national rate averaging approximately 2.48%. Additionally, since 1991, the property tax rate has lowered over $8 per thousand dollar value. The 2008-2009 property tax rate is $18.13 per assessed thousand dollar value.
With its long term, 25 year lease agreement, SongBrook management cannot arbitrarily raise rents due to increased capital expenditures, ever! Your rent figure may increase from year to year due to inflation and property taxes; however, your "value" remains the same. In other words, your rent figure in 2009, for example, offers the same "dollar value" as your rent figure did in 1994!
Owning Land vs Leasing Land -- Do the Math and Make the Comparison.
Thank you for the opportunity to share a concept which may be entirely new to you. Your housing decision may be one of the largest investment decisions you may ever make; certainly you agree your desire is to make a wise investment decision. Because of your interest in manufactured housing, and to complete your investment decision, it is important to consider the dynamics of Buying versus Leasing the land your home will be placed upon.
Let us focus upon two home placement options: Manufactured Home Communities (otherwise known as parks where Homeowners' lease their homesite and amenities) and Manufactured Home Subdivisions (fee simple communities where Residents own their home, land, and a portion of the amenities). Those who are determined to purchase their land often say, "why lease? -- the landlord will just increase the lease fee whenever they have the opportunity". After understanding the details of this "Buying versus Leasing" worksheet, you will understand that statement is simply false at SongBrook; here is why. At SongBrook, lease fee increases are tied to three items only: the consumer price index, property taxes and other governmental assessments, and lease renewals. This means capital improvements and expenditures are never passed through to the Homeowners. Lets see why over a 30-year period, leasing your land is undoubtedly the most wise and secure investment decision.
When asked, "why should I pay SongBrook an average of $500 per month in lease fees", among many items to consider are the benefits of on-site management and no homeowner association fees (which by the way increase in a subdivision). If you purchase your land in a fee simple development with similar amenities to those at SongBrook, you might ask yourself who maintains the common areas, who is responsible to maintain the community center; clean the pool; scrub the toilets; maintain the streets, utilities, ponds, waterfalls, and walking paths? Then ask yourself who pays the taxes on the community center, who pays the natural gas and electric bills which heat and light the center, swimming pool, and spa? Also, who pays the property and impervious water taxes on the entire facility? The answers to such questions are the Homeowners who live in that community. If you own your land, it is unlikely that you will be eligible to receive bulk discount rates averaging nearly $50 per month on expanded basic television and garbage service. Then ask yourself "Is paying $75,000 for approximately 5,500 sq. ft. of bare land really in my best interest"? If those few questions alone are not enough to encourage you to consider the advantages of leasing land, please review the following "Buying versus Leasing" worksheet.
The calculations on the worksheet have been reviewed, verified, and are supported by the Manufactured Housing Communities of Oregon (MHCO), and a former version has been published in the November 1995 issue of "The Allen Letter", a national newsletter written by renowned manufactured housing consultant George Allen. The following are a few highlights and items of importance.
First, on page 2, you will find two different scenarios: Subdivision and Land-Lease. The scenarios compare apples with apples; meaning each are 55 and over manufactured housing facilities, both providing community centers. Also considered is whether the prospect finances their home/land and improvement package or pays for their package in cash. As you can see, the average total hard cost difference in this scenario between owning your land and leasing your land approximately $63,000, a substantial difference -- in favor of leasing.
Now, lets review page 3 to view the results of the real number crunching. An important note is the applicable numbers reflect an annual inflation rate of 3% over the 30-year period. Additionally, it is important to review many different items with prospective Homeowners who are considering spending $75,000 for a small, bare piece of land, including: interest payable and loan fees, real estate taxes versus personal property taxes (which by the way is an average savings of nearly $68,000 over a 30-year period if you lease your land), the appreciation value of your land if you choose to own it, various tax deduction strategies, and the "biggie" -- interest earned. It is enjoyable pointing out to prospective Homeowners that the value of the $75,000 not spent on bare land, but rather placed in a simple tax-free municipal bond averaging a 5.5% return is could be nearly $374,000 in 30 years. That investment covers the homesite lease and contributes toward the total savings over those 30 years! Again, the $75,000 investment alone does not consider the entire picture, however, the bottom line numbers do. As illustrated in the "Bottom Line Dollar Figures", taking everything into consideration, if you lease your land and finance your package you might save nearly $40,000 (depending on your tax bracket) over a 30-year period. However you lease your land and pay for your package in cash you might save over $140,000 over a 30-year period. SongBrook management and Homeowners believe that is a significant savings!
The numbers are accurate; you are encouraged to "take this document to your personal accountant and have him or her review the numbers with you". Furthermore, you are encouraged to knock on the doors of current land lease Homeowners, especially those who reside in SongBrook and allow them to share with you their personal advantages. We are confident you will clearly see the advantages of leasing land, "the wise investment decision."
This report should not be considered a contract or promise by SongBrook management. It does however reflect the best estimate available of current and future trends.
SongBrook "55 and Over" Fair Housing Exemption
Despite general prohibition against familial discrimination, both state and federal law provide a number of exemptions, one being the "55 and Over" exemption; codified at 42 U.S.C §3607(b)(2)(C) and at ORS 659.033(b)(6). The Department of Housing and Urban Development have developed regulations outlining the "55 and Over" exemption at 24 C.F.R. §100.304. In order for a housing provider to fit within the "age 55 and over" exemption, the housing provider is required to:
* assure that at least 80% of the units are occupied by at least one person who is 55 years of age; and publish, and adhere to, policies and procedures which demonstrate an intent to maintain the housing as "age 55 and over" housing.
SongBrook LLC adheres to these standards, providing unique and specialized services for the 55 and over community.
SongBrook Longterm Lease Benefits
What we create in a community such as SongBrook, is “quality leisure living”; a chosen "lifestyle". We understand our prospective Homeowner is capable of purchasing a home anywhere, but in most cases they are interested in a "lifestyle" which offers a sense of security, a community center, R.V. parking and storage, recreation, and fellowship.
One important factor to this “lifestyle” is the long term site lease at SongBrook. Through experience, we have found that people retiring must make the equity in their present home work for them in their retirement years. An ideal opportunity is to use the cash you could have invested in bare land elsewhere, continue to create equity in your new manufactured home, and be able to have all the amenities which SongBrook has to offer. When you really think about it, leasing is the desirable choice. Not only do you receive a good size homesite, you save on taxes, maintenance, some utility expenses, and homeowner fees; you choose a new “lifestyle.”
If you someday decide to sell your home, the sale to a new Homeowner is completed in much the same way as any other real estate transaction. You may either list the home with a licensed broker, dealer, or sell the yourself, and you are entitled to all profits received. The lease at SongBrook is designed to adjust with property taxes and the cost of living, which is keyed to the Consumer Price Index. SongBrook cannot arbitrarily adjust your lease payment.
Some of the benefits you receive with your SongBrook long term site lease are:
* Lifestyle of a “55 & Over” community
* Protection of your investment through community rules and architectural standards
* Financing options for home, garage, and land improvements
* Free use of the community center and recreation areas
* Sub-metered Water and sewer paid
* Discounted Cable Television and Garbage
* Taxes paid on the land
* Electronic entry gates
* Pet exercise area
* Community garden area
* Enjoyment of Muriel Pond and Harvey Falls
* Maintenance of the greenbelts, walking paths, and storage areas
* Maintenance of streets, storm drains, and sewage system
* On-site Assistant Manager
SongBrook LLC operates an on-site manufactured home dealership, otherwise known as "Lifestyle Sales Corporation", offering pre-owned homes with attached garages.
Call today and begin living your dream lifestyle.