Owning Mobile Home Land
I have the opportunity to own a couple of parcels that can host mobile homes. One of them, in Talladega, already has a mobile home on it.
However, I don't know if it's worth it. What are the pros and cons of owning land someone else rents for their mobile home?
1. It is relatively easy to seize abandoned mobile homes under Alabama law.
2. Mobile home lots generally have the best cash on cash returns of any investment, but they are usually also the most management intensive.
3. Do you have sanitary sewer or septic tank? If septic tank, you must check local health dept regs for how many mobile homes allowed on each septic tank. The last time I checked, it was a maximum of 4. It might have changed. Also, check into what has grandfathered and what not. If regs have gotten more strict, a failed system might be very expensive to replace because then you will be on new regs. Tenants are VERY VERY VERY hard on septic tanks. They never follow the rules about what they put down the drain, about not doing 18 loads of wash in one day, and about not parking on top of the field lines. Count on pumping out the septic tanks at least once a year, just to be safe.
4. What are the roads like? Are they concrete or crushed stone or chert or what? Are you set up to constantly ditch and crown the roads? Which brings up another point, where does the water go? Have you observed runoff patterns while it is pouring down rain?
@Arnold Finkelstein
The pros would be collecting rent but have no maintenance responsibilities for the house. The mobile home owners pay all utilities. There’s a good chance you’ll end up owning some of the homes.
You could buy a new or used home, pretty it up, and sell it, rent it, etc.
I still like just renting out the dirt. ( over 20 years doin’ this stuff :))
It is appropriate that you replied, Denise, because the lot in question is a tax deed that I'm going to seek ejectment for. This lot already has someone's mobile home on it, and someone (not the prior owner of the parcel) is living in it.
At present, I don't know if they are on city sewer, although I suspect they are as it's a reasonably congested part of Talladega. Nor do I know anything else about the drainage, etc. I'm just trying to determine if owning a lot and renting it out to someone's mobile home is worth it.
Am I required to have some kind of insurance as the owner of a lot that someone is living on in their own mobile home? I can't imagine I can charge very much for the lot.
Arnold, lot rates depend on the market. You'll have to research the area to see where the market is. There might be sewer all around but no hookup to that property, which might have been on a septic tank since before sewer was out there. If you can hookup, that is good, but usually there is a high fee to do that.
Plus, if it is relatively congested, what is the dirt worth for redevelopment? What is the zoning? Can it be changed to a more intensive use?
Coincidentally, my Multi-Housing News feed just send me notice of an article today about investing in manufactured housing. I don't think BP lets me put external links in a post, but if you do a search on multi-housing news +manufactured +2023 I bet it will take you right to the article.
How does one find comparables?
I'm starting to think it might not be worth it. If I have to pay for maintenance and insurance, it's hard to imagine how much would be left over every month. You can rent a whole house in Talladega for $900. I don't see a patch of land renting for very much.
#2 Mobile Home Park Investing Contributor
- San Antonio, TX
@Arnold Finkelstein If it's just owning the land, then the pro is not having to deal with the repairs of the mobile home. I've been in the business since 2007 as a mobile home investor. I've had my ups and downs like any other asset class in real estate. Overall, it's been quite profitable and a fun segment in real estate.
Feel free to DM if you have any other questions. Hope that helps!