Have you ever looked at real estate listings in England? You’ll notice that they come in two varieties: “freehold” and “leasehold”. “Freehold” means that you own the land outright, whereas “leasehold” means that you only get the land for a portion of time and then you have to give it back. Some of these “freehold” leases are short-term, such as 20 years, and others can be for centuries. 99 years is very common. Many of these “leasehold” properties are owned by the Royal Family, such as Prince Charles. In many ways, the British Monarchy was the unknowing father of the American mobile home park business model.
The mobile home park is identical to the Lord of the Manor
Under the medieval Lord of the Manor structure, the Lord (landlord) would own the land and then rent the land out to his vassals (tenants) in exchange for a percentage of their crop production (rent). This has been a standard arrangement in Europe for around 700 years. Of course, today the tenants in the mobile home park do not pay in crops, but in cash.
Your only value add is that you own the land
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Under the feudal model of England, the only value add that the Lord offered was that he was the owner of the land. He did nothing remarkable with it. In fact, whether he lived or died, the rent just kept coming in. This is true of mobile home parks in the U.S. The owner receives rent because his name is on the title, not because of any time, effort or risk on his part. Unlike a restaurant, he does not offer great food or atmosphere. And unlike a tech company he does not have to create an “insanely great” product. He just has to be the owner of the land to get paid.
Renting land is the easiest form of real estate in the world
Is there anything better or easier in real estate than just renting land? No concerns about buildings. No worries about clogged up toilets. Nothing to burn down or blow away. Maybe that’s why the Royal Family is always smiling. Prince Charles receives $23 million per year from his leasehold rents – that’s a princely sum indeed.
There are no mobile home parks in England – but I’m sure the Royal Family wished there were
It’s sad that the only form of mobile home park in England is the “caravan park” which is strictly for RVs on a recreational basis. The Royal Family would definitely love the mobile home park business model, as it would offer far greater rent income than farming for potatoes and wheat. In addition, it would give them the chance to create their own trailer park reality TV shows for the BBC, and there’s additional income in that.
The British leasehold business model is the closest ancestor to the U.S. mobile home park. All you have to do to experience the joys of true rental income from land is own a mobile home park. Of course, there are no royal titles in the U.S., but King of Trailer Court is not a bad thing to be when the checks roll in.