In NC, most mobile home parks do not sell the land.
I thought the point of buying a property is to eventually own it outright.
If you pay off the mobile home but find yourself unable to pay the lot rent… you can still get evicted. This situation persists forever, unless you move the home.
Buying land with utilities and moving the home is so expensive that most people would have to take out a personal loan or multiple loans to do it.
Personal loans are usually restricted to people with high incomes and/or credit scores. (People who can simply skip the park and buy a house on land in the first place).
Paying the lot rent and mobile home combined also makes it not a particularly cheap alternative to renting a house.
But so many people do it that I feel like I must be missing something that connects the dots and makes this make sense (logically and financially).
What am I missing?
ETA – sorry if this is a very stupid question. My parents were city people so I genuinely do not know how people benefit from using parks
In: Economics
Lot rent used to be very inexpensive. When I got divorced I took all the debt and she took most of the assets.
I bought a mobile home and my lot rent was ridiculously low. Much lower than any apartment or house rent. I got out of debt and had a pretty nice nest egg saved in about two years. Made buying my first house easy since I had the down payment of 20% to avoid PMI.
So it is not a stupid question… But go look at a used trailer and park rent in your area. And then look at average house prices and average apartment rents…. I’d bet you will find a decent used trailer and a lot rent will be lower.
Now… Does that make it a good investment? A difficult hearing and it would depend on HOW you do it. Most people their best investment will be a house. But for example my situation I lived cheap so I could get out of debt and invest and I actually did that.
Do the leg work… I’d bet you will find the lot rent and trailer is less than rent. It is in my area.
I don’t know if this is the right sub but John Oliver did a piece on this exact thing and explained the crushing problems with mobile homes at its current state.
Mobile homes and lot rents used to be much cheaper.
But now they are (in most places) basically a trap for people who want to own a home but can’t qualify for a mortgage on something that includes the land.
My best friend and I bought a cheap mobile home in a park right years ago. We split the cost of $17k. Paying $391 in lot rent per month is a hell of a lot cheaper than $1500/no for a studio apartment, even if I have to abide by ridiculous park rules that dictate what I can or can’t do inside my own home. It has enabled me to pay down a lot of debt and hopefully save for a piece of land where I can build my own little house at some point. The advantage of a park though is your little slice of property taxes each year is very low and typically someone else deals with the snow plowing and rubbish removal.
There are 3 maybe 4 parts of a home. There’s the land underneath the place, the building, the contents and the right to occupy the building. When you rent an apartment in the city, often the landowner and the building owner are the same. In some areas the landowner might give a building developer a 99-year lease, so then the building and land owner are different, the building owner can then sell the individual condos to people with a 99-year lease.
Likewise in a mobile home park, the landowner and the building owners are often separate. In theory the building owner can move the building elsewhere, even though it often isn’t practical or physically possible.
It used to be fairly inexpensive to own or rent a mobile home and live in a mobile home park. Outside of town or the crummy part of town made it a low demand area. Urban sprawl or gentrification has surrounded many mobile home parks to where the land is becoming too valuable and the alternative use might be profitable, to equalize it the rent being charged to stay in the park has to increased.
There are also different laws that classify a mobile home as a vehicle and not a home so things like property taxes, types of loans you can get, etc. are not the same as owning a traditional home. But it was historically cheaper and that made it the only option for a lot of people.
If you rent a home, the landlord has to service and maintain that home. If you rent land, and you own the home, the landlord is not responsible for any problems. In many mobile home parks, the mobile home is given to you for free, with the landlord knowing that you dont have $4000 to move it if you leave.
I think that is pretty common in mobile home parks. You generally lease the land that your mobile home sits on. In Hawaii, it’s not uncommon to have your brick and mortar home built on leased land. The leases can be fairly long. 40 or 50 years in some cases. Problem is, when the lease is up, they can sell the land and you are shit out of luck. Or, god forbid, you want/need to sell the house with 5 or 10 years lift on the lease. No one is going to touch it. Source: I bought a couple houses when I was living in Hawaii. Never touched a leasehold, though. A little more info… When you when you buy a house in Hawaii that includes the land, it’s called “Fee Simple”.
Best thing home owners can do is form a co-op with each other and buy the park’s land outright and own/maintain the property together.
Cheaper than an apartment with more freedom is the draw for most people, I believe. Living experience depends a lot on neighbors and what kind of park it is. I don’t understand why someone would buy a tiny home when they could buy a mobile home twice the size for 10-20% of the price.
I have a park model mobile home in Arizona. It is a non-profit co-operative that has been running for 35 years. I have a 99-year lease on my lot and my heirs will get a 99 year lease of their own when I die.
I pay $110 per month for water, sewer, trash disposal and maintenance and use of community pool, spas and other amenities.
It is a great deal.
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