Why are lot rent fees so high?

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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
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.
 
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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.
 
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.
 
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.
 
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.
 
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.
 
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...
 
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.
 
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
 
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.
 
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/
 
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.
 
Originally Posted By: Bandito440
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.


Yep, landlord (owner) has to turn a profit.

Why bother with rentals if they break even every month.
 
If you live in a high booming RE market like the Seattle one, then the communities make some sense at a older age. $300k gets you not much here and fixers in the suburbs are now $175-200k. Those need a lot of money to bring back up to standards.

In my case, 52k for the double wide and $650 a month made sense. Even over ten years accounting for rent increases, I still come out ahead. So it depends on the general market in my opinion.
 
Please tell me which planet allows renters to pay only what their actual costs are to the landlord. Or do you think you are entitled to place your home on somebody's land for free?

As to the value for cost, the housing situation you describe is decidedly low end in terms of market. Low end often means poor and poor in America usually means being taken advantage of.

You do realize that a lot of your neighbors will have their rent paid by public assistance? That alone drives up the market price.

Either invest in a better neighborhood or continue renting. These non standard living situations rarely play out well long term.
 
DO NOT BUY A TRAILER ON RENTED LAND. Sorry for shouting, but, you are about to get ripped off. I lived in a trailer on a rented lot from age 10 to age 21, when I moved into an apartment. Things were nice at first, then the old landlord died and his wife sold the park and retired. The new owner raised the lot rent steeply and began harrassing the tenants. As an example, a good looking, well maintained fence that was installed 10 years before with the old landlords approval had to be removed. The new landlord decreed that fences were forbidden. TV antennas went next and you were required to pay for cable. Most residents were poor and were unable or unwilling to fight the owner in court. The residents had to scramble with every rules change. I had to relocate a fuel oil tank on my Moms trailer because the new landlord did not like the original installation. Every month brought new demands from the owner. You will own a depreciating asset that is difficult to move and maybe impossible to sell, and the owner can change the rules anytime ( unless the law is different now )
 
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