Buying a home is likely the largest investment you will make in your lifetime. You expect that with a lot of care and feeding, your investment will grow in time while providing you with the benefits and comforts of owning your own home.
When people buy a home, most assume they will also purchase the land – land that also appreciates in value. However, when you purchase a land lease home in a Parkbridge community, you only buy the home and lease the land on which it sits.
That begs the question: why would anyone consider this a good investment?
Here are three solid reasons:
1) You are still able to build equity
A land leased home will still appreciate in value over the years, as is typical in freehold homes or condos, providing you invest properly in its upkeep. For example, if you purchase a newly built home in a Parkbridge community, you’ll have warranties if things need to be replaced within a certain time frame. After warranties expire, homeowners will have to replace or upgrade items as the years go by, just as in any other home. If you buy an existing or older land lease home, there may be things that need upgrading right away, in order to enhance the value of your home.
“Handled properly, it can be a great investment,” says Miles Patterson, a former resident of two Edmonton Parkbridge communities, Parkland and Maple Oak Ridge. Patterson recently relocated to British Columbia. “Some people tend to forget that these units require regular updates – a roof every 25 years, furnace every 15-20, et cetera. If these are done properly, the units will hold their value well and can easily skyrocket in price.”
2) You live in a managed community with onsite staff
When you purchase a home in a Parkbridge land lease community, the landowner (Parkbridge) also invests in the upkeep and enhancement of that community, which helps raise the value of your home. Onsite staff are available to respond to residents in a time of emergency or to consult with homeowners about necessary upgrades to shared amenities, like recreation centres.
Patterson, a retiree, says he loved living in two Parkbridge communities because they were so well maintained.
“Yes, you pay rent, but that rent includes a lot of things – road clearing and repairs, providing space for various community clubs to operate, green spaces and walking trails, “he says. “The maintenance of the parks was absolutely wonderful. You felt like you were driving into a green community, clean and nicely landscaped.”
In short, Parkbridge has a vested interest in maintaining and improving its investment, just like a homeowner. And residents have confidence that they can easily reach out to someone who cares as much about the community as they do.
3) You have choice
Land lease homes run the gamut of types: everything from detached homes or townhomes that are built onsite to manufactured homes that are built in a factory in pieces and then stitched together onsite. Older land lease communities also feature mobile homes.
Retired couples may wish to ‘right-size’ into a smaller home in a managed community with amenities and community groups that help build connection to others – something that has been particularly valuable during the pandemic.
“The security of neighbours is a factor at our age and every community we have lived in has had good neighbours,” says Patterson. “The community feel was so strong in Parkland that I was clearing driveways for neighbours and took care of an elderly neighbour’s lawn for her. It just seemed right.”
A young family looking for a way to get into the market will find that a detached home or townhome in a land lease community will be easier to afford. It’s a particularly good model for young families who want to use it as a stepping stone to freehold home ownership.
4) What land lease is not
To be clear, land lease is not affordable housing. Affordable housing is typically rental housing that is subsidized by the government, but it’s a broad term that can also include subsidized housing provided by the private, public and non-profit sectors.
Land lease, on the other hand, is affordable home ownership because you pay for your home and not the land on which it sits, which typically makes it less expensive.
It’s an affordable option that allows you to build equity while enjoying life in a well-managed community, in the type of home of your choosing – all good reasons why people choose to invest in land lease homeownership.