Home Buying in Millsboro>Question Details

Pat, Both Buyer and Seller in Wilmington, NC

"Land Rent" in Baywoods, Millsboro DE

Asked by Pat, Wilmington, NC Thu Nov 19, 2009

The listings in Baywoods show "land rent" which are extremely high-10K for a townhouse and 7K for a small house! Can anyone explain this?

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5
Kathy Sperl-Bell’s answer
Pat,
What you are paying for at a community like Baywoods is lifestyle. When you live in a community with lots of amenities, one way or another you are going to pay for it. In other communities where you do own the land, you may pay $200 - $400/month or more for an HOA fee or a Condo fee or both. When you do not own the land, you are also paying lower taxes since you only pay taxes on the house itself. I guess what you need to do is decide what is important to you and how much you are willing to pay to get it!

If I can help with more info, just drop me a line at kathy@kathyandbill.com.
1 vote Thank Flag Link Thu Nov 19, 2009
There are two aspects related to understanding the value of Baywood land leases: the value of the amenities included in the lease and the savings associated with not needing to purchase the land. In almost every Buyer's scenario, Baywood residents are "cash positive" when leasing the land when compared to communities wherein you need to purchase the land.

As a Baywood resident for the past 10+ years, the amenities are outstanding. HOA fees in nearby communities for comparable amenities ranges from $4K to $6K per year. If you happen to be a boater, the value is even greater since Baywood residents can lease a slip in our sister communities for $950 per year versus $3K or more for a private boat slip.

In terms of the savings associated with not needing to buy the land, this varies based upon whether you're a cash buyer or need financing. The following is a good rule of thumb for understanding the value of an improved lot in a comparable community: Interior lots are valued at approximately $100K; wooded and/or pond view lots are worth $200k; and golf course lots are worth $300K and up.
My lot is a private wooded lot and I'll use the $200K for this example. For cash buyers, that's $200K
that you retain in other investments and over time, a conservative investment portfolio should average a 5% to 7% return. That's $10K to $14K in yearly income. Wooded and pond view lots have an average lot rent of $9,500 annually. So, between the value of the amenities you receive and the return on your investments, paying land rent in Baywood is the best deal around.

We needed financing when we purchased in Baywood and by not needing to finance the cost of the land, we were able to go with a 15 rather than a 30 year mortgage. The differential in principal paid on a 15 versus a 30 is huge. For buyers needing financing, they too have a cash positive experience by purchasing in Baywood.

Run the numbers and see for yourself!
0 votes Thank Flag Link Sun Jul 27, 2014
Baywoods is a golf-course community with perhaps the most beautiful landscaping to be found in all of Sussex County. The lifestyle is based on the idea that the homeowners need to do no outside work (yard or exterior of home), so more time for golf and leisure activities. Live like the rich!
0 votes Thank Flag Link Thu May 3, 2012
Hi Pat,

Are you referring to the amout of the "land rent" or the fact that there is "land rent " in this particular community?

Chris Kavanagh
Coldwell Banker Residential Brokerage
Bethany Beach, DE 19930
302-829-9068
chris@5starbeachhomes.com
0 votes Thank Flag Link Thu Nov 19, 2009
I can help you understand... give me a call 302-588-7890...
First you are talking about "land rent" and then you mention a property with a structure on it that it appears you can occupy?
Kai
PS what are the addresses?
or email me at kaikai113 Gmail
0 votes Thank Flag Link Thu Nov 19, 2009
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