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Tuesday, November 24, 2009

Understanding the Land Lease

It is important for prospective buyers in a manufactured housing community to understand the benefits of the “land lease” concept before they become residents.

Because the majority of prospective buyers have owned their own homes and land, there is a natural assumption that the two are inseparable; that it is better to own your own land and unwise to build a home on land you don’t own. Leasing land is a totally new concept to many even though it has worked for Jensen customers for decades. And because people are unfamiliar with it, they are initially wary of it until they learn more.

What many people don’t initially appreciate is that a Manufactured Housing Land Lease Community (MHLLC) is able to give you more home for your dollar exactly due to the land lease. By owning your own home and leasing a home site, you are able to get a dramatically better lifestyle for less. You get more home, a private community with amenities, and the best neighborhoods for the money anywhere.

The desire to purchase both home and land is driven by past experience and the absence of a true, in-depth understanding of the multitude of benefits associated with leasing and private community living.

Jensen communities’® approach is integral to our mission to ensure our residents enjoy the comfortable, carefree lifestyle they seek. It delivers value and significant advantages that far outweigh any perceived disadvantages.

Without the land leasing arrangement, Jensen Communities would have to sell homes at much higher prices that would include the cost of the land and development. The land lease also allows for common services and recreational amenities to be used and paid for by the entire community. And very importantly, the land lease establishes Jensen as the manager for the community so residents don’t have to manage it themselves to ensure a high standard and protect their investment and ongoing enjoyment.

More and more homeowners (especially “Boomers”) have experienced, or are at least familiar with, leveraging their home equity to improve their lifestyle. Whether consolidating bills, paying college tuition, buying a new car or making home improvements, they understand the advantages of putting their equity to work rather than having it sit idle.

Similarly, Jensen home buyers achieve greater value because they are not burdened with adding the cost of the land to their purchase price. They can buy more home with more of the special amenities they desire and often bank a surplus that can be saved as a nest egg or for emergencies. This is especially appealing to our customers who are generally living on a modest fixed income.

For most people, home and property ownership is really nothing more than a perception. In reality, no one with a mortgage truly owns either until the mortgage is fully paid off. But despite this fact, even with huge 30-year mortgages, people view themselves as “home owners”.

So why such a fuss about buying the land your home is built on? This desire is really based on a perception. When this is clearly understood, freeing capital and improving lifestyle through land leasing makes absolute sense.

One of the biggest concerns often expressed is “What if the land my house is built on is sold to someone else?” Jensen’s core value is its integrity. We’re not in the business of building communities to turn around and sell the property upon which they’re built for another use. In over 80 years in the business, we’ve never done it and have no plans to do so in the future.

Quite to the contrary, prospects view our collective investments as an extremely positive benefit. Naturally, it’s in Jensen’s best interest to protect our investment by creating and enforcing rules and regulations designed to ensure a quality lifestyle for our residents and keep them as long term customers. It’s these rules and regulations that ultimately guarantee a resident’s high level of satisfaction.

Homeowners have an equal incentive to keep up their home and sites to maximize their investment and enjoy the pride of owning their own home. Without our collective investments through land leasing, we would be unable to maintain (and guarantee) the high standards we’re all so proud of, and that have become the hallmark of our success.

Leasing the land means Jensen does the heavy lifting. People who have owned their own home know that it comes with responsibilities: grass, trees, shrubs, wells, septic, water and sewer services, power lines, driveways, foundations, walls, and fences all mean maintenance and eventual replacement. While residents are responsible for their own homes and typically some site maintenance, Jensen’s does the most burdensome of it so that they can enjoy the more enjoyable aspects like flower or vegetable gardening. There are no extra payments or special assessments for replacing a driveway or removing a tree when that is needed.

Leasing land in a MHLLC provides great value for our customers. The advantages, in terms of an improved, carefree lifestyle alone, far outweigh any initially perceived disadvantages.

Find out more at www.jensencommunities.com and “Get in on the Good Life!”

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