What is a Land Lease?

Through the ten years of practicing real estate in Naples, Florida, I’ve had the occasion a time or two to work with buyers and sellers where there was a land lease in place on the property.  Many people are confused about land leases, how it affects them and should they enter into anything where a lease is held which requires a monthly payment from the homeowner.  Land leases are mostly prevalent on properties such as mobile home parks, of which we have a few in Naples.  However, there are also condominiums that have land leases on them as well, as most of them run for a minimum of 50 years.  Sometimes, when the lease is nearing it’s stop date, the owner will want to renew it especially if it’s been profitable for the investor and it’s been well managed and maintained.  Keep in mind, with most lease renewals, there is almost always a rent increase.  These are what are referred to as “cash cows” because the owner doesn’t necessarily want to develop the land but knows there’s available income stream, which is why he’ll find a developer to build on it, then sell or rent the product.  Is it a major factor in property in Naples other than mobile home parks?  No.  Are there still some out there?  You bet.  We have a lovely condo listing in the well sought after community of Royal Harbor, which is nestled on Naples Bay, namely Harbor Lakes,  http://www.ruthbethem.com/blog/one-sweet-little-deal/2010/09/23/ It’s a 54 unit enclave that was developed in 1973.  Years ago, owners were given a chance to pay the land lease for their unit off, and this particular owner was one of them.  Therefore, unlike their neighbor that pays $356/month in a land lease fee, which is in addition to the $333/month condo fee, this unit owner owes nothing.  That’s a savings of $4,272 per year and that does have an impact on the ROI as well as it’s viability.  With that being said, most condos with land leases are often discounted relative to other like-kind properties within the area that can often offset the risk with the land lease.  In some cases, it’s just a small reduction but in others it could be a significant increase.  Land leases are more common in a metropolis area and are more commonly associated with co-ops.  For further information or any questions on Naples real estate please contact Ruth Bethem at Ruth@RuthBethem.com or direct at 239-777-7007 or toll free 877-777-7545.

One Sweet Little Deal

In Search Of: Loving owner to make this condo a home and enjoy it as it was meant to be. WOW! A $20,000 Price Reduction today. NOT A SHORT SALE, NOT A REO. Aggressively priced to sell NOW. No waiting. No banks to deal with, no third parties! Well maintained end unit by original owner in centrally located Harbor Lakes at Royal Harbor. Located just 2 short blocks to the upscale Naples Bay Resort where fine dining, boutiques and a marina reflect this southern cities way of life: slow and chic. The condo is nestled in a low density, 54 unit enclave just 1.5 miles to the beach, with a view of two gentle lakes with the swimming pool planted in between them. Take your morning walk to the prestigious 5th Ave district and jog, walk or run to the gentle sounds of the palms and poincianas and enjoy the Neapolitan lifestyle Naples is famous for. This lovely end unit two bedroom condo is splashed with neutral colors, newer carpet, newer window treatments, hurricane shutters on lanai and all windows and overlooks the private swimming pool. The true icing on the cake is the land lease is PAID IN FULL. A small marina across the entrance may afford a boat dock rental opportunity that would get you into the Gulf of Mexico in 15-20 minutes weekdays! Pride in ownership is well evidenced in this bright and clean condo. Don’t wait, there’s only two other condos available in this entire development as it is a preferred location for snowbirds and tenants alike.

More more info on this condo, please call Ruth Bethem, Broker-Associate, ABR, CRS, GRI toll-free at 877-777-7545 or email me directly at ruth@ruthbethem.com.