Being new here I appreciate all the info I have gleaned from this forum. I have read almost everything on that other forum but it seems people are reluctant to share their info as though someone might steal their idea. This is the opposite. Everyone is sharing the info that I have been looking for. Thank You Everyone.
This is a post I made on the other forum, I want to hear what you have to say about my observations. Please don’t beat me up too much. I am a newbie and I plan on buying my first MHP hopefully in a few months if the right deal comes along. I am just posting my outside observations.
There has been something plagueing my thoughts. The HUGE varience and, in my opionion, the high lot rents in my area.
In about 30 miles lot rents range from $140 to $385, and within 40 miles it goes up to $450. That seems VERY extreme. Of course with different ammenities parks should vary. But this seems like a lot.
The other issue is the high price of lot rents. Most around here are $330 and higher. That is making a mobile home payment with lot rent within $100 of a stick built, and about $100 higher than a 3/1 apartment.
I am new but this is what I see happening. The high and rising lot rents are causing the homes to be worth less and less. It appears the park owners keep raising the rents and that is their main concern. At the expense of the homes in the park the owner is artifically increasing the value of the park and artifically decreasing the value of the homes.
For simplicity sake use these numbers. All tenants in a park together pay 100k for housing. That number does not change. What does change is how much to housing and how much to the lot. It seems it was once 30k to the lot and 70k to the house. Now it is 70k to the lot and 30k to the home. This does not look like a sustainable business model to me.
Soon rents are high enough that the books will show the park is worth a lot of money. The owner sells. The new owner takes the park but it is full of people stretched to the limit and they will shortly flee for apartments that are priced MUCH lower than the mobiles.
Many parks here are owned by ARC, Affordable Residential Communities. They know their tenants have no choice but to pay when they raise the rents. ARC is NOT “Affordable”. They are anything but. This is not against ARC, even the family owned parks here seem to charge too much to make it affordable.
How long can this last? We are here because we know this business can and does make money. At what point do mobiles become non affordable? When Single Family homes and Apartments rent for less than a mobile how long can it last?
I would love to hear some of the experienced among you give their opinion. Have you seen the same thing? Am I missing something? Am I off my rocker?
Please teach me.