SHOULD I BUY OR RENT A MOBILE HOME LOT?

So you’re buying a mobile home and need to figure out where to put it. Should you put it on raw land? Should you put it inside a manufactured home community? There’s no right or wrong answer. Except the one that’s right for you. Financial Requirements From a financial perspective, the mobile home park lot has less up-front cost, as it already has utilities and infrastructure (like a road, parking pad and patio). Raw land may require you to install water, sewer, electric, parking pad, etc., and that can run tens of thousands of dollars, in some cases. So the first question, when you are considering raw land, is what it will cost to make it “move-in” ready. Hidden Costs There can be other hidden costs when buying raw land to install your mobile home, other than what you can see. Don’t forget that you will have to have to a real estate closing, and that’s going to require a title company charge, a survey, and other expenses. Plain and simple, buying land to develop into a home site is capital intensive, and you have to be ready. Repair & Maintenance Concerns In a mobile home park, the park owner must provide all utilities and road repairs. You are only liable for repairs to your home. However, when you own the land, you’ll have to be ready to fix anything that breaks, such as the water line, sewer line, power line, driveway, etc. That’s all part of land ownership. So make sure that you have those numbers in our personal budget. Location The overriding benefit to owning your own land is that it’s in a location of your choice, and not predetermined by the location of the mobile home park. This means that you can be by the lake, or by town, or wherever you want to be and can find land for sale. Buying your own land opens up a whole lot for freedom and options for where you end up living. And that’s worth a premium to many people. It is important to note, however, that many cities do not allow mobile homes on lots within the city limits, and mobile home parks may be the only game in town if you want to be in a certain city or school district. Financial Considerations When you own the land, you eventually pay it off. When you rent the lot at the mobile home park, you never own it, so the rent continues forever. However, it’s not that simple. When you pay off the land, you still have to pay the property tax and repair and maintenance. So it’s not exactly an apples to apples comparison if you just use the park’s lot rent vs. your land payment. Conclusion There are millions of people who have chosen to put their mobile home inside a mobile home park. And millions more who have elected to put it on raw land. There is no right or wrong answer – only the answer that is right for your individual needs and goals. Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with over 250 communities spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate. www.MobileHomeUniversity.com