thinking of selling house and buying trailer

bill_hDecember 9, 2005

what are the pros and cons to a trailer in a rental park??? we are thinking of selling our home and moving to a condo or a trailer for about 7 yrs til we retire. we thought about a late 70s or early 80s single wide they are available for about 8k to 10k, figured to put the house money into investments til we retire. my wife likes this idea, iam leaning more to a condo.

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15 years ago i bought an older mobile in a park where i payed space rent to the park. I met my wife and i moved in with her with the idea of selling my place, which i did. We were very lucky to have sold it as times were hard in our area at the time.The park would not let me rent the trailer out, so if it would not have sold, i probably would have ended up walking away from it and giving it to the park, who in turn would, no doubt,have rented it out. The trailer was too old to move and set up on property as it has to be less than thirty years old in our area in order to meet codes. So the morale to this story is to check into the can's and cannot's of the park before jumping into anything as you might not be so lucky as i was when it comes time for you to sell. I think a lot of it depends on the park itself as well as how things are going in your area real estate wise. Hope this helps, Happy Holidays, Mark

    Bookmark   December 9, 2005 at 9:51PM
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Can not offer any advice as to trailer parks but I will offer this to consider.

We purchased ($4000) a used 1971 mobile home almost 19 years ago and put on it on our own 3acre property. Our plans were to live on it while we built a new home. Then life happens (job changes, purchased a business, purchased land out of state and was going to move). Forward 15 years and we are still in the mobile home and we buy another property nearby and start working on the land and are now building a house.

During this time the living has been cheap (we paid cash for the mobile home). That's been very helpful in lean times and allowed us to save money to build a new home. The 3acres we lived on appreciated greatly and so we decided to purchase larger acreage for the new home. The mobile home is not worth anything at this point and will cost us about $2000 to dispose of.

As for mobile home living. The early 70's model we have is very cold and drafty. Not sure there is even any insulation in it! We keep the storm windows in all year because of the drafts and either the heat or A/C is running all the year. The floor is freezing cold during the winter. If you purchase a mobile home pay attention to the windows and insulation. I'm sure new models are much improved. Also you might want to check about insurance. We had a difficult time 18years ago finding an insurance company that would provide a homeowner's policy on a trailer of that age. You may run into the same problem purchasing homeowner's or renter's insurance.

You might consider purchasing property to put the mobile home on rather than a trailer park. Whatever the cost of the the land and utilities you will recoup it when you sell the land. Over 7-8 years it could be a good investment. You could sell the land with or without the mobile home (we sold the land without the mobile home).

As I can tell you ... you never know what life will bring and may end up living there much longer than you planned! You may even decide that you like it as it is small and easy to care for especially if your retired.

    Bookmark   December 10, 2005 at 9:54AM
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I live in a 31-year-old doublewide that sits on 8 acres with a well and septic system. I got the place for what I thought to be a pretty decent price just over 50K. The house was listed as having no value, but I think that was to prevent any liability issues on the part of the sellers.

The house has issues, but it is livable. It drops a good 2Â from one corner to the other, and any releveling effort would probably be extensive. It is drafty, and there are areas you can actually see through to the outside. But it should do until I build a new house here in a couple of years. My main concern is just how much I should put into this place.

One consideration I have is getting a new MH versus having a house built. I donÂt have any facts and figures, but my understanding is the MHs, like an auto, lose considerable value immediately after purchase. Can anyone add some thoughts about that? Is it true? If so, what percentage does the MH drop?

    Bookmark   December 10, 2005 at 10:02AM
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When we looked at manufacturing homes for my daughter, the first obstacle was the rate of interest she would have to pay on the mortgage. It was much higher than for stick built homes. That was enough to scare us away.

I have watched manufactured housing and talked extensively with friends and family about their choices and it comes down to most of them regretting the choice of a mobile with just two exceptions. Well maintained senior parks with lots of amenities held their value and manufactured housing in the immediate vicinity of colleges actually increased in value because they could be rented to students. Otherwise the result was anywhere between disappointing and disastrous. Past a certain age, MH can't be moved. Past a certain age, they won't be allowed in a new park. I thought that putting a MH on your own property was a much safer bet, but now a cousin who did that 30 years ago is facing a tear-down and is facing a new mortgage just as she is nearing retirement age, while the rest of us are in our paid off homes. My best advice is if you can afford not to - don't. There are always exceptional circumstances of course.

oh, and the same daughter who decided not to buy a MH made a nice profit on the house she did buy, but married a man with a MH that they have been unable to sell despite its being in a nice park.

    Bookmark   December 10, 2005 at 1:15PM
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thanks for the info, i didnt think about insurance being hard to get. my thoughts were sell the house put 150k in investments, pay cash 8k to 10k for the trailer, in a park live in it til we retire, then if it sells fine if not walk away from it. iam in mich. now and have no intentions whatsoever of staying here after i retire. the only way to have a trailer in this area is in a park, cant put one on land in the city, and i dont want to drive any distance to work. plus with land i would have to mow,shovel snow, etc. not my thing.

    Bookmark   December 10, 2005 at 7:37PM
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Mobile homes do depreciate, just as an automobile does, and they are difficult to get a decent amount of insurance on. The newer ones may be slightly better built than the ones from twenty years ago, but not enough to make me want a new one. Friends of ours recently bought a new one, and it is nice enough to look at, but is still a mobile home. If you buy one, buy from an individual, if possible, that basically wants to get if off their property. They require more maintenance than a regular house, and you will likely end up putting a good amount of money into it. We aren't in one now, but have been in the past, and although it is acceptable in many ways, and way better than many people in the world have, it's still not where I would want to live forever. It just never feels permanent, imo. As someone else pointed out, they are energy hogs, not usually well-insulated, have non-standard doors and windows, and are prone to air and water leaks.
Mrs H

    Bookmark   December 10, 2005 at 11:18PM
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Another thing to consider is the park it'self. How liberal are the rules? Do tennants like it there? Is there onsite management? Who mows? Who removes snow? Can one landscape in any way? Pets? How often is there a rent increase? Is it mostly older people or younger ones with children? Where are the children's playground? Are you going to hear children screaming or crying from your unit? How many cars are you allowed? Where do you park the extras? What about an RV, is there parking for that? Garbage pickup? How many bags? If you have visitors, Where do they park? Get a copy of the park rules before you decide to buy.

    Bookmark   December 11, 2005 at 11:39AM
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While all states and local jurisdictions have strict codes regarding how a manufactured home must be set up, very few if any local codes have any regulations specific to the type and quality of construction. Instead the codes simply state that if the manufactured home met all applicable codes at the point of manufacture it will be deemed suitable for use in this respective jurisdiction.

The problem here is that many manufacturers are totally profit motivated and they have found a simple method of circumventing the codes. They carefully place their production facilities in areas that have no codes specific to manufactured homes. The reasoning here is that if there are no codes at the point of manufacture they are then free to build the home in any manner that fits into their bottom line and they can still attach the mandatory label that says "the structure met or exceeded all applicable codes at the point of manufacture".

I once had an opportunity to tour a manufactured home production facility and I was totally amazed at how they are built.

They had a large welding shop where they made the basic steel trailer frame, then the axles and wheels are bolted to the frame in a very temporary manner because many jurisdictions require the wheels and axles to be removed during setup.

The frame is then moved to a loading dock type pit in another building. The moment it is set in place they literally throw a layer of OSB down on the frame and attach it to the frame with ramset guns that shoot steel fasteners into the steel frame. An overhead crane then drops the completed floor joists, underfloor plumbing and subfloor on the frame and it is nailed to the lower plywood from underneath.

A forklift then brings a huge roll of carpet and holds it at one end of the floor while the workmen stretch the carpet for the full length of the unit and it is cut off the roll. They then lay a steel template down and cut the carpet out of the areas that will later receive vinyl such as kitchens, bathrooms and laundrys. With the carpet removed the vinyl, which is precut slightly oversize is then laid in and the edges are tucked under the carpet. The completely prefabbed rear and end walls are then brought in by overhead crane and set down on top of the carpet and they are nailed in place, then comes the internal walls.

The next step is to install the appliances and the furniture is stacked in each room, and the front wall is finally set in place. This explains why you have 32" wide appiances in a house that has a 28" or 30" door. Once the furniture and appliances are set in, the front wall is dropped into place and the final step is to drop the finished roof on top. The entire assembly process only took 4 hours.

Now what does all of this mean to the consumer?

The upside is that when you compare building costs or the price of conventionally built homes they appear extremeely affordable.

The downsides are that you end up with a home that was constucted primarily by unskilled workers, many of whom are working as day laborers for minimum wage with very little if any training and totally ignorant of material quality or any bona fide code requirements.

Banks and financial institutes are fully aware of these facts, therefore most will not even write a mortgage on a manufactured home, and of those who do, they are primarily the high risk lenders that demand very high interest rates and short term mortgages.

Now, while even the most modest of stick built homes will appreciate in value if properly maintained, manufactured homes will depreciate 20% or 30% the moment you sign the purchase agreement and their value goes downhill from there.

Future maintenance can be a real problem because manufactured homes are often constructed with materials and techniques that would be considered totally sub-standard for a stick built home, therefore most of the material suppliers do not carry the necessary parts and materials to properly maintain manufactured homes. And of those who do carry those materials the inventories are quite limited and the prices are considerably higher.

As a master plumber and master HVAC tech with over thirty years in the trades I can tell you first hand that you will find it very difficult to find skilled tradesmen who are willing to take on the challenges of repairing manufactured homes.

The bottom line is, yes, manufactured homes are cheap, but that is because those who make them know the true value of their product.

    Bookmark   December 11, 2005 at 12:27PM
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While I was still in Houston, I did a search for MH dealers there just to find a few things about the one on the property I had bought. I stumbled onto a forum dealing strictly with MHs in the Houston area.

Someone posted a warning about a bad experience with a particular salesman at one Palm Harbor Homes location. Someone else chimed in that they knew the guy, but that he had moved to a different location. Still another stated that, no, he was no longer with Palm Harbor, and told where he was currently working.

The deal is, that forum tracked various salesmen as well as shared experienced (nearly all bad) with both. It seems that an honest MH salesman is difficult, if not impossible to find!

    Bookmark   December 11, 2005 at 2:43PM
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You might check out the costs of renting the spot. My father's new wife had a trailer in a nice trailer park. She owned the trailer, but was still paying something like $500 a month for the rental, which I thought was outrageous. She had a difficult time selling the trailer too, and ended up having to sell at a much reduced cost.

I wouldn't live in one here in Oklahoma, they seem to invite tornadoes.


    Bookmark   December 12, 2005 at 3:44PM
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well after reading all this, iam thinking a condo is more my style, wont be able to invest as much, but i should recover the full amount i spend on it. plus no yard work, plus the one iam looking at is adult only, so no noise. i sleep during the day, and thats a big plus. the 1 drawback is only parking for 2 cars, so one will have to be stored or sold, but looks like i might run into the same thing with the trailer pk.

    Bookmark   December 12, 2005 at 8:24PM
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I live in Panama City Florida...hurricaine alley it seems. I have lived in a mobile home for 22 years, a new 16X80 Fleetwood Weston for the last 13 years. My mobile home has had NO hurricaine damage while houses around me have had roofs blown off. A few shingles did lift up on our mobile home.

We have just moved into our new house that we had built 10 ft from our mobile home. We are now going to sell our mobile home. This trailer has been nothing but wonderful the entire 13 years. It is quite roomy, feels like a house and folks started asking if we were going to sell when they saw the foundation for the house being poured.

So the whole bit for my story is: if you get a well built mobile home to begin with, you will be happy with it. Not all mobile homes are trash. I have been very happy in our mobile home.


    Bookmark   December 15, 2005 at 11:12PM
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In my area mosts of the homes going up are manufactured by mobile home companies and delivered in two pieces. They have 6" walls and good insulation, siding and shingles. Many are years old and are still looking good.

My house was built with many manufactured panels assembled on the foundation. It is well built and still solid at more than 25 years. It cost $25,000 and is worth over $100,000 now.

As with stick built houses look around and even check to see if you can visit the factory. The techniques have improved greatly. Good luck.

    Bookmark   December 16, 2005 at 7:10PM
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The first time I mopped the kitchen floor, I was horrified to discover a huge number of large cuts in the linoleum. When the replacement was done, the installer told me that they cut wall board and such on the floor during construction ... and think nothing of it because "most of the folks who buy mobile homes will not be the kind of people to complain".......oh yeah??? But it says a lot about the work ethic.

    Bookmark   December 17, 2005 at 9:44PM
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BillH if you sell your home for $150,000 and do not invest it in a new place.You know what happens unless you do your home work?Its called Capitol gains tax and if your not careful you just throw a good chunk of that money away.Hiding it in CD's or what ever will not always work.You would be safe for 1 year.

House trailers are nice to beat paying property tax.But check the lot rent.Around here its $300.00 and up per month just to park it there.Not to mention a Tornado always goes for the trailer parks.

Condo's are nice but $150'000 does not go far toward one these days.Why go down hill?

    Bookmark   December 18, 2005 at 5:10PM
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In some states you do pay property tax on a mobile.

    Bookmark   December 19, 2005 at 10:59AM
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In my state we pay a 'parking tax'. It's the same per $1,000 as the property tax on a home. As for getting a condo, I've seen where they have stricker rules than in mh parks. You can't change anything on the outside...trim, color, doors, etc. You have rules to follow when you buy homes in a lot of subdivisions. What it boils down to is you have rules where ever you live. You just have to find what you want to put up with. Also, condos and some subdivisions have home owner assoc. fees. I've seen them at $200 or more a month.
As for using unskilled labor for mhs, you have the same thing for stick built homes. You really have to do your homework when you want to buy any type of home.


    Bookmark   December 20, 2005 at 6:11AM
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You pay property tax if you own the property the trailer sets on.If you do not own the property how can you pay property tax?Here they call the tax on a trailer privilage tax.Unless you own the land of course.

    Bookmark   December 21, 2005 at 11:11AM
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In WV, for example you pay property tax on anything you own. A vehicle or a mobile home whether on your own property or on rented property. Here in OH, we pay a trailer tax and or property tax, whichever is cheaper to the owner in a park or on private property. So much per thousand on the trailer tax but more of an assessed value on the property tax. Also, if one removes the axiles from the home it is considered permanant and the taxes are assessed for a larger amount. Once the home is put on a foundation on ones own property it becomes a home and is thereby assessed an amount accordingly. Taxes vary from state to state. One should also consider that in some parks there are extra fees for club house, swimming, and even a tenants association.

    Bookmark   December 21, 2005 at 1:34PM
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johndeere, There has been an exemption on capital gains from the sale of a home since 1997. A single person can receive up to $250,000 tax free and a couple up to $500,000. I do however think that purchasing a condo would be a better way to go, as a condo would have a chance to appreciate over the next 10 years. An older MH in a park would depreciate while rent on the space would continue to go up.

    Bookmark   December 28, 2005 at 5:36AM
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I have a double-wide that I bought new three years ago. I live in Southern California in a nice senior park. I love my house. I looked at condos, and at the time, a condo that wasn't nearly as large cost twice as much. Because I bought it new, I got them to do quite a bit of customizing, too.

There are so many variables as far as appreciation is concerned. Here, in So Cal, mobile homes appreciate at the same rate as stick built houses. My house is now worth $50,000 more than when I bought it.

Location is also important. If my house were in a park near the beach, I would have paid twice as much. I understand that this is not true in many other states.


    Bookmark   December 28, 2005 at 11:37PM
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I just wanted to say that if you're buying an older mobile home, I would stay in the later 80's or early 90's range.

We live in an 88 that my parents bought brand new at the time. They orginally planned to buy a used one and live in it for a bit before we would build a house on the land. (They ended up divorcing and the trailer still sits here but we hope to do something in the next 5 years). I remember looking at the older ones and they were all in really BAD shape.

In most cases, people with trailers don't do much to improve on the places at all. They figure they're cheap so who cares. But would you really do that with a stick built home? No! I think that's where the whole stereotype comes from or something. I mean our neighbor put up a huge fight because my parents were putting a trailer on this land. He still makes comments and from what I can tell, the man thinks he has some mansion and we live in a lowly trailer but their home is in far off worse shape than ours! We have done a lot of work to fix the place up and he's done nothing in years to his home. ...So anyway, back to my point, an older mobile home can require tons more work than you think. Even ones that are 10 years old, are going to need maintanence and updated but maybe not as much.

The older mobile homes I have been in, I have noticed the draftiness and other things about it that I don't like. They don't seem to be as bright inside or open as ours. Of course we have painted all of our walls, replaced flooring and put in new doors and are working on replacing windows. We've had a few water leaks that required fixing subfloor and each time we threw in new insulation and repaird holes. Anything we've done has helped considerably. The winters have been colder the last few but we've been keeping our thermostat at least 7 degrees cooler than we started with!

Good luck deciding!

    Bookmark   December 29, 2005 at 10:15AM
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We had a mobile put on my 3 acres when we married. The house was paid off in 8 years (it was a used 80's Schult when we bought it). When it was time to build a house we had saved $45,000 toward construction costs. We moved the home to a small park - maybe 8 homes. It was wonderful. When we had more than an inch of snow a guy would plow the driveways. I enjoyed being close to people but separate. We had great neighbors and a yard so small I mowed it with a push mower and weedwhacker. Fast forward and we are back on the 3 acres in a house. We had no trouble selling the mobile. Now the one who plows the driveway is ME and we go through mowers like crazy since we are on a rocky hill. I would move to another small, well maintained park in a minute. It's like anything else - do your homework. Not all trailers are the same.

    Bookmark   December 29, 2005 at 7:29PM
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If your whole purpose for selling your house is to lower your living expenses so that you have more money when you retire, have you considered buying a duplex? If you pay cash for it, you would be getting an income from the other unit which would probably be more than if you invested the money in stocks/bonds/etc. If you took out a mortgage for it, the income from the other unit would be paying most if not all of the mortgage payment for you... You would always have a place to live/an income, if stocks plummet plus the property would increase in value over the years. You could probably rent to a couple in the same age group as you and your wife if you advertised it as geared for "retireees"...

    Bookmark   January 1, 2006 at 3:03PM
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