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Why are lot rent fees so high? #4450141
07/05/17 07:11 AM
07/05/17 07:11 AM
Joined: Dec 2012
Posts: 1,905
WNY
redhat Online content OP
redhat  Online Content OP
Joined: Dec 2012
Posts: 1,905
WNY
Perhaps my neck of the woods is an exception, or those in your area are lower...

Looking into buying a house and the thought of a manufactured home came to mind. A lot of the communities in my area seem to have a high price for lot rent. Would really like a semi-temporary place for the next 5 years or so. GF is going to school, my landlord keeps talking about selling the house that I am renting an upper of and I'd perhaps like to see my money get a little return.

My calculations, you can get a home anywhere from 7k to 20k, however there's plenty for more or less. Lot rent is in the area of $640 a month. Most figure in taxes, water, garbage and snow removal (which is negligible IMO as if you were off of a main roadway, you town/village/county/state would be clearing your roadway).

I'll figure taxes as $4,000 a year, perhaps using (on the high side) $30 of water a month, and $100 of garbage removal a month.

YEAR MONTH
$7,680 $640 Lot Rent
----- -----
$4,000 $333 Taxes
$ 360 $ 30 Water
$1,200 $100 Garbage

$2,120 $177 <----- Where is this going?

I guess I can somewhat understand the whole "you're in a community and they take care of that". But am I missing something here. I couldn't even imagine taxes on that little slice of land being that high. You're literally getting half of a playground worth of land to rent.

Seems like a terrible value being in a community. Unfortunately my county does not allow manufactured homes on lots of land. I'd buy .5 acres and stick one on that for the next 5 years.

I'll tell you what, continually hearing that the place your living might be sold can drive one to being mad.

Last edited by redhat; 07/05/17 07:13 AM.

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Re: Why are lot rent fees so high? [Re: redhat] #4450151
07/05/17 07:20 AM
07/05/17 07:20 AM
Joined: Feb 2012
Posts: 3,870
NEUS
Bandito440 Offline
Bandito440  Offline
Joined: Feb 2012
Posts: 3,870
NEUS
After insurance and incidental expenses, the rest is profit to the landowner. That's what puts food on their table. Owning a trailer park isn't a charity.

Do some math comparing the trailer with buying a small home and renting for five years to make sure you're on the right track. I don't mind helping later this week if you'd like.


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Re: Why are lot rent fees so high? [Re: redhat] #4450157
07/05/17 07:24 AM
07/05/17 07:24 AM
Joined: Sep 2008
Posts: 9,235
Ontario, Canada
IndyIan Offline
IndyIan  Offline
Joined: Sep 2008
Posts: 9,235
Ontario, Canada
Can't you cherry pick a house on a nice street in a so-so neighborhood for $50-60k? Get one near a college and you could rent it yourself after you're done with it if you can't sell at a profit.


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Re: Why are lot rent fees so high? [Re: redhat] #4450170
07/05/17 07:36 AM
07/05/17 07:36 AM
Joined: Nov 2008
Posts: 12,761
NH
supton Offline
supton  Offline
Joined: Nov 2008
Posts: 12,761
NH
I'd think sooner about a prefab home on a bigger lot. Traditional home setup. If you live there for say 5 years perhaps you'll cover costs when you move (appreciation).

If it wouldn't pay off after 5 years, or the initial cost too high, then just eat the cost of renting. Kinda sucks but closing costs are not trivial; and the first few years of ownership is mostly paying off interest. There's also some safety to be had in being able to move whenever the winds change: change in schooling, job, whatever. I know there are nice trailer homes out there, but if this is short term then perhaps the risk is too high, and you'd lose less by renting.


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Re: Why are lot rent fees so high? [Re: redhat] #4450192
07/05/17 08:02 AM
07/05/17 08:02 AM
Joined: Jul 2013
Posts: 2,284
Outer Banks, NC
NormanBuntz Offline
NormanBuntz  Offline
Joined: Jul 2013
Posts: 2,284
Outer Banks, NC
Simple answer: because they can be. It's supply and demand. If you're looking for a home for the next five years, I'd find a rental home with a two year lease that's renewable. Reason: you have no guarantee that in five short years a purchased home will appreciate and provide income tax deductions that are greater than your resale costs at the end of the term.

But if you're serious about a manufactured home or the like, I believe modular homes have proven to be a better asset to own.


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Re: Why are lot rent fees so high? [Re: redhat] #4450197
07/05/17 08:08 AM
07/05/17 08:08 AM
Joined: Aug 2003
Posts: 11,013
Buffalo, NY
JTK Offline
JTK  Offline
Joined: Aug 2003
Posts: 11,013
Buffalo, NY
It's a seller's market in our area today redhat. Anything decent doesn't stay for sale long and there's lots of new builds going up. Lot rent will follow suit on this. I lived in my first home for 5yrs and second for 7. Made money with both. Unless you're actually buying a place, stay renting. Renting is always cheaper.


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Re: Why are lot rent fees so high? [Re: redhat] #4450235
07/05/17 08:49 AM
07/05/17 08:49 AM
Joined: May 2017
Posts: 127
South Texas Rancho
TexasVaquero Offline
TexasVaquero  Offline
Joined: May 2017
Posts: 127
South Texas Rancho
Just move to Texas, carpetbagger. We got a good market for mostly everything. Heck, your car won't get rusted out.


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Re: Why are lot rent fees so high? [Re: IndyIan] #4450245
07/05/17 09:02 AM
07/05/17 09:02 AM
Joined: Oct 2010
Posts: 9,126
Virginia Beach
Astro14 Offline
Astro14  Offline
Joined: Oct 2010
Posts: 9,126
Virginia Beach
Originally Posted By: IndyIan
Can't you cherry pick a house on a nice street in a so-so neighborhood for $50-60k? Get one near a college and you could rent it yourself after you're done with it if you can't sell at a profit.


Seriously?

In what fantasy scenario can you buy a livable house for that price? You can't get the lot, much less the house, for that kind of money...

Spend a little time on Zillow...


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Re: Why are lot rent fees so high? [Re: redhat] #4450256
07/05/17 09:12 AM
07/05/17 09:12 AM
Joined: May 2012
Posts: 4,533
Baltimore, Maryland, USA
zzyzzx Offline
zzyzzx  Offline
Joined: May 2012
Posts: 4,533
Baltimore, Maryland, USA
Lot rents are high because of property taxes, and artificially restricted supply.

Re: Why are lot rent fees so high? [Re: redhat] #4450295
07/05/17 09:42 AM
07/05/17 09:42 AM
Joined: Dec 2016
Posts: 279
Sav ga
NStuart Offline
NStuart  Offline
Joined: Dec 2016
Posts: 279
Sav ga
You lose on mobile homes. Terrible investment, no gain.bad idea!!!


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Re: Why are lot rent fees so high? [Re: NStuart] #4450337
07/05/17 10:29 AM
07/05/17 10:29 AM
Joined: Jul 2008
Posts: 1,113
British Columbia, Canada
ecotourist Offline
ecotourist  Offline
Joined: Jul 2008
Posts: 1,113
British Columbia, Canada
Originally Posted By: NStuart
You lose on mobile homes. Terrible investment, no gain.bad idea!!!

That sounds correct. Mobile homes depreciate rather than appreciate.

The best option (if you insist on buying a mobile home) would be to buy a used one so someone else will have taken the biggest hit. You'll still likely lose money, just less than on a new one.


2000 BMW 528i 5MT
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Re: Why are lot rent fees so high? [Re: ecotourist] #4450380
07/05/17 11:17 AM
07/05/17 11:17 AM
Joined: Dec 2016
Posts: 279
Sav ga
NStuart Offline
NStuart  Offline
Joined: Dec 2016
Posts: 279
Sav ga
Originally Posted By: ecotourist
Originally Posted By: NStuart
You lose on mobile homes. Terrible investment, no gain.bad idea!!!

That sounds correct. Mobile homes depreciate rather than appreciate.

The best option (if you insist on buying a mobile home) would be to buy a used one so someone else will have taken the biggest hit. You'll still likely lose money, just less than on a new one.

Maybe if you can afford to keep it rent for a profit while maintaining it


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Re: Why are lot rent fees so high? [Re: redhat] #4450405
07/05/17 11:47 AM
07/05/17 11:47 AM
Joined: Nov 2008
Posts: 1,041
Las Vegas
ArrestMeRedZ Offline
ArrestMeRedZ  Offline
Joined: Nov 2008
Posts: 1,041
Las Vegas
Real property can be depreciated for tax purposes, but with some exceptions, it generally goes up in value. Mobile homes actually depreciate. As an investment property, mobile homes generally attract a higher percentage of less than ideal renters. For me, this has made rent collections more difficult, and has resulted in high levels of damage and vandalism when evicting problematic tenants.

I have had a number of real estate investments. The only one I continually lose money on is a mobile home. I would never do it again, even to the point of leaving my buildable property vacant.

Re: Why are lot rent fees so high? [Re: Astro14] #4450419
07/05/17 12:07 PM
07/05/17 12:07 PM
Joined: Sep 2008
Posts: 9,235
Ontario, Canada
IndyIan Offline
IndyIan  Offline
Joined: Sep 2008
Posts: 9,235
Ontario, Canada
Originally Posted By: Astro14
Originally Posted By: IndyIan
Can't you cherry pick a house on a nice street in a so-so neighborhood for $50-60k? Get one near a college and you could rent it yourself after you're done with it if you can't sell at a profit.


Seriously?

In what fantasy scenario can you buy a livable house for that price? You can't get the lot, much less the house, for that kind of money...

Spend a little time on Zillow...

I did, near D'youville college there's a few at 60 that would compare to a trailer home quite well IMO. I did some courses there and there are blocks that are very nice and some that aren't so good, but my car never got broken into so it can't be that bad. Good parks and some on the water nearby, seemed pretty good for a young couple IMHO.
If they are willing to investigate a trailer park, then I think a neighborhood like this is a pretty good option if they pick the right house.
Here's Grandma's house for 60k https://www.zillow.com/homes/for_sale/Bu...753_rect/14_zm/



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Re: Why are lot rent fees so high? [Re: redhat] #4450494
07/05/17 01:43 PM
07/05/17 01:43 PM
Joined: Feb 2011
Posts: 188
Canadia
fsdork Offline
fsdork  Offline
Joined: Feb 2011
Posts: 188
Canadia
Owning a structure on someone else's land can easily turn into a nightmare. I would do the math on your situation, and either make the decision to rent or buy - not a half-measure.


2011 Ford F-150 Lariat S/C 6.2L 4x4 - 76K km
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