I’m looking at buying a smaller park in a hot market out west, average sfh price is around $230k. The park location is very good, the park itself is ho hum.
While lot rents average in the market at around $300 a month, the cost of homes in parks are very high. Being a licensed realtor I can view the sold data. How would you approach buying a smaller park, with older homes, in a market that has booming used trailer prices? In case nobody believes me, here are some recent sold homes that I think will make you think twice, I didn’t cherry pick these either.
-2000 single wide 2x1 $53k
-1983 single wide 3x2 $35k
-1991 Single Wide 3x2 $36k
-1999 Single Wide 3x2 $45k
-1983 Single Wide 2x2 $33k
I think one take away from this situation is that as Frank says; “Lot rents are shockingly low nationwide.” The park I’m looking at has some very old homes, I know we all aspire to be in the land rental business, but is their value in improving the quality of homes in the park? A lot of the homes above were either sold for cash, or had a local lender finance the deal.
Feel free to ask any additional questions.
Take this with a grain of salt because I don’t know the wider context, but my take away from what you said is not “Lot rents are too low and home prices are really high so I should buy homes” but instead “Lot rents are too low so I should just raise lot rents”
I’m guessing that house prices are high because they’re ‘subsidized’ by low lot rent, and if so the best business decisions is probably to just raise lot rents and remove that subsidy.
Coguy, Our company specializes in revitalizing mobile home parks. We offer Storage Container tiny homes. What we have for mobile home parks is a 2 story Duplex model that is 3bed/2bth. It fits in a 16x40 space. So with the average mobile home park lot being 16x80, you can get twice the rent from the same lot space. This will also upgrade the appearance of your park, which in turn you will be able to increase the rents. Contact me for details. Thanks Rod.