Does anyone have any specific areas they won’t consider, due to extreme weather - ie excessive flooding, tornadoes, extreme cool or heat etc.
Conversely, are there areas that you favour that have better weather conditions?
We would be very concerned about any park on a coastal area that has a history of damage from hurricanes. We would also be very concerned about a park that is in an agricultural industry that is in a drought zone. Other than those two situations, weather is not that big a factor. Of all the diligence items that make a park a winner or a loser – other than hurricane and drought exposure – weather comes in probably last behind diversity of employment, price of alternative housing products, future job growth, etc. I guess that air-conditioning and heating has changed a lot of the living habits of the American population, and has minimized the impact of weather.
On the hurricane concept, we have a park in Charleston, SC, but it is about 40 miles inland, and does has not had significant damage in past hurricanes. The real danger spot in a hurricane is the stuff near the water, like the parks that used to be near the beach in Biloxi, Mississippi. I looked at one of those parks before Katrina, and I think it is now a field.
Thanks Frank
The cost of insurance coverage has gone up a lot in Oklahoma. Ironically it is at least as much from all the hail and ice storms as tornadoes. Getting an insurance quote will tell you a lot about what the damage rate is likely to be over the long run.
-jl-
Thank you Jefferson
Does anyone consider how the states regulate or don’t regulate communities when considering where to buy?
Is the way the home itself is taxed part of anyone’s decision making process?
Not for us. It’s much more important to find the ‘right’ deal at the ‘right’ price. Whether mobile home taxes are 1% or 2% of assessed value is not going to make or break a deal. California has the most job-killing legislation in the land, but we are not buying there principally because of the high valuations, not the unfriendly legislation.
That said, we do protest taxes (and other legislation) when they are too high.
-jl-
Thanks Jefferson.
I have clients that do, so I wondered how widespread this is. I can see some logic in making that part of the decision depending on where people are coming from and what their goals are, just as I can see ignoring those factors for people approaching acquisitions differently.
I know that those fully engaged in seller finance as a captive finance company are examining the idea of consolidation within a single or a few states just to hold down the costs of licensure and reporting, and we are seeing some of that among the big players. Doing so creates a clear dollar advantage for them.
Having owned communities in three states in the past, I did find that each offered their own advantages and problems. Illinois is a highly regulated state, but is still landlord friendly when going to court compared to both of the other states (Oregon and Florida) I used to operate in during the 70s and 80s. I also like the advantage of low cost taxes on the homes because it provides a sales advantage when selling homes. A good example is Saddlebrook Farms in Grayslake, Illinois. They are selling HUDs for 6 figures in their community. The annual privilege taxes are about $400 per year durning the first year and go down over time. If the buyers were to buy the same homes on real estate, the taxes would run about $6,000.00 per year and continue to go up. The difference will pay a considerable amount of lot rent, and the sales operation there pitches it as free lot rent which helps them sell those 6 figure homes for significant profits.
I personally like the Midwest, but for other reasons than mentioned. After many booms and busts in various employment sectors, I’m fairly convinced that the safest long-term jobs will be the Midwest because of agriculture.
It is a fact that population follows employment. Meat and vegetable processing centers need to be in a convenient location to where the farms are. Meat processing needs to be cheap as well so we can all afford to survive. Therefore, plants won’t be built in CA or NY where there are higher employment costs, overall real estate costs, higher taxes and more regulation. Although anything is possible, I feel that agriculture jobs will never go overseas. People will always need food and the government will always subsidize that. When people get hungry, they riot! 20 years from now, I believe there will still be food processing plants in states like NE, IA, and WI. The company names may change, but the agriculture industry will always be there…
As someone who lives in an agriculture state (Missouri) I totally agree with your synopsis on American food production being a strong industry. As the rest of the world becomes richer, the first thing they want is American food. It is the one thing that we do better than anyone else on earth, and it is the most important commodity that exists. Detroit would still be flourishing if it manufactured food rather than cars.