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Thread: Would you buy a manufactured home in a mobile home park?

  1. #1
    Senior Member jp1's Avatar
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    Would you buy a manufactured home in a mobile home park?

    A year ago I watched this video and was intrigued.

    https://www.youtube.com/watch?v=2Z4vz5Ms0rE

    A company has started putting high end manufactured housing in an older mobile home park in a prime neighborhood of Palm Springs. Last weekend we were down there on vacation and I suggested to SO that we take a look. The homes are really nice and obviously well built. They currently have four models they are selling, ranging from a 600 sq foot 1 bed/1 bath for $150k to a 1000 sq foot 2 bed/2 bath. All of them have a lot of outside deck space and a covered parking area that can hold 2 cars tandem.

    There are issues we'd need to sort out from a practical standpoint (not least of which that SO still needs to be in San Francisco for work, so we'd have to be bi-home-al and also factor in the cost of him commuting weekly between Palm Springs and SF.) (since I work from home I could simply move down there and go on with my life occasionally coming to SF on the company dime when I need to be here for work meetings and the like.) Ignoring all that for the moment my main concerns are the big picture financial issues which seem to center around 3 things that I can think of:

    1. Although the mobile home park is in a prime location and is definitely going upscale as a result of this company's efforts to replace the older old-school mobile homes (currently around 50% replaced), it's still a mobile home park. And the company selling the new and improved homes is not directly affiliated with the mobile home park owner, so presumably has limited control over what the park owners may or may not do. How significantly will that effect our resale value?

    2. The park itself (again, not affiliated with the sellers of these homes) has a 65 year lease. We'll be long dead before that ends, but at what point do home values for homes on rented land begin to lose value? If we move there and like it I expect that after 10 years or so we'd probably view it as our forever home and this question would stop mattering since we don't have any kids that we need/want to pass assets on to.

    3. How nervous should I be that we'd be buying an expensive asset that relies on a rented space to place it. Current rent for a spot in the park is $686/month, going up 5% on january 1. That seems reasonable for now, especially since water/trash/sewage/pool and other common space is included in the rent. But should I worry that they may double that rent next year or the year after? What do we do then?

    This is the link to the company that is selling the homes: https://www.palmcanyonmobileclub.com/

    At the end of the day the home itself, as well as the park, seemed quite nice. Public spaces like the pool area have all been recently redone and are finished. And overall this seems much preferable from a lifestyle standpoint, at least in my mind, to purchasing a similar size/cost condo in Palm Springs. If I weren't nervous about dropping $250k of our assets into this and potentially not being able to come close to being made whole by selling I would totally do it. But I don't want to be stuck a few years down the road with an asset that isn't worth anywhere near what we paid for it.

    Everyone's thoughts/experiences will be much appreciated.

  2. #2
    Senior Member bae's Avatar
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    My father lives in Palm Springs.

    He had rosy visions of what it would be like...

    Have you lived there before year-round? It's pretty brutal for part of the year.

  3. #3
    Senior Member iris lilies's Avatar
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    I have these random thoughts:


    As we enter our senior years and are not working for money we do have to keep a eye on rising costs of living. Doh, No great wisdom there.But there are always costs associated with real estate, costs that rise whether it is real estate taxes, condo fees, rental fees. $686/month doesnt seem like a lot to me when I compare condo fees in my city for similar sq footage. I mean $686 is more than the kind of fees I’ve been looking at which is more like $500 but you are in California after all. Of course you don’t have snow removal and apparently no grass cutting, but there are pool maintenance costs and roads.

    I watched a tv show about million dollar properties in London, and one potential million Dollar apartment had a lease that ran out in 19 years. Because that wasn’t a very long time when compared to the standard 60 year lease, the real estate agent would only listed it for $600,000 rather than $1 million that a neighboring property got. So yeah, I definitely think that uncertain ground under your home would affect the price. The question is really in 10 years 15 years how uncertain is the lease? There’s no way to know that.

  4. #4
    Senior Member iris lilies's Avatar
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    Two sets of friends have moved to Palm Springs. Two of the guys were already from California so they were used to dust and heat, but the other two were not. I haven’t heard how much they like it.

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    I would never buy a mobile home unless I own the land it is on. You are purchasing a depreciating asset and have no control over rental costs. Watch John Oliver's piece on them from this April.

  6. #6
    Senior Member iris lilies's Avatar
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    Quote Originally Posted by Yppej View Post
    I would never buy a mobile home unless I own the land it is on. You are purchasing a depreciating asset and have no control over rental costs. Watch John Oliver's piece on them from this April.
    I think mobile homes and manufactured homes are a little different in warm climates than out where you are. It is a common type of housing in the sunny West and South, but yes, mobile homes do depreciate. Not sure about manufactured homes.

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    Quote Originally Posted by Yppej View Post
    I would never buy a mobile home unless I own the land it is on. You are purchasing a depreciating asset and have no control over rental costs. Watch John Oliver's piece on them from this April.
    Ditto: Mom had a fixed income. Her rent would go up. The fees to cover water cost and lawn mowing would go up. All on top of depreciating value. That said, it was her final home and she loved it. She had good neighbors as it was a 55+ community. She coped with the rising costs and she was happy to be there.

    So I think it depends on your circumstance and what you need from the investment of your capital.

  8. #8
    Senior Member JaneV2.0's Avatar
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    I'd be wary of arbitrary space rental charges--and having the land sold out from under you, which happens. I do like the idea of having stand-alone housing with minimal upkeep.

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    Senior Member Teacher Terry's Avatar
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    I wouldn’t want to live there during the summer. Here they put manufactured homes on land you own. Only mobile homes are in parks and the rent goes up every year and they depreciate. The manufactured homes here don’t depreciate.

  10. #10
    Senior Member SteveinMN's Avatar
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    Quote Originally Posted by iris lilies View Post
    mobile homes do depreciate. Not sure about manufactured homes.
    I'm unfamiliar with specific laws in California, but in most localities, manufactured homes are treated pretty much as mobile homes are. The fact that some manufactured homes are far more grand than stick-built homes is immaterial to most lawmakers and code-setters.

    For this reason and for the "it's-only-a-mobile-home" stigma that still exists in many places, appreciation in manufactured homes is not a lock as it has been for traditionally-built houses. Some houses will appreciate based on quality, location, and the setting (for instance, some manufactured homes can be built over a crawlspace or basement). Others will be viewed as mobile homes sans wheels and will not appreciate.

    Without owning the land beneath the home and without being able to sign a lease that runs for multiple years (the way commercial real estate writes leases) I'd be reluctant to pursue this opportunity. One other consideration -- around here, mobile home parks are being legislated out of existence. They're not making any more of them and the ones which still exist are considered non-conforming and restricted on growth and other zoning changes. Yes, you may be able to move the home elsewhere on its own wheels, but to where?
    Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome. - Booker T. Washington

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