Renting Lot w/ Sewer - Water to single MH - Posted by Luke

Posted by TeddyB_SC on August 18, 2003 at 20:23:21:

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Renting Lot w/ Sewer - Water to single MH - Posted by Luke

Posted by Luke on August 18, 2003 at 14:38:39:

I have been looking at several lots in my area that would be perfect for a single MH.

The lots are generally cleared half acres in a relatively uncluttered area, but also in a desired area. There are other MH’s in the area that are in good condition. The lots also have wells in place with sewer hookup.

They sell for around $11-12k. I have been looking at them and am also looking to buy some land as a part of my savings.

How feasible is it to buy this land and then rent it to a single MH that someone else would move onto the lot. I do not want to do a Lonnie deal and bring in my own old home for a land home package, I just want to rent the land to someone needing a place to put their home.

How long to lot rental agreements in MH parks usually go last?
Also, if someone rents and then stops paying, is it more complicated because their home is on the land? Can I just file an eviction and have the sheriff escort them off the premises and lock up their home? If they can’t pay rent they can’t pay to move it off my land so I am stuck with a vacant MH not producing any payments. What does a MH park do in that situation??

If I can buy for $12k and get $200 a month in lot rent it is about a 20% return per year. If I financed the lot there would be $50-60 per month in cashflow off of it.

What do you think about this idea?

Re: Renting Lot w/ Sewer - Water to single MH - Posted by Tony-VA/NC

Posted by Tony-VA/NC on August 18, 2003 at 16:10:44:

Your local courthouse will determine how you go about evicting someone and their home. Abandonment issues will also be addressed there.

While on paper it looks like you create a 20% return by simply buying the land, the downtime of such a set up may well kill that return. There are simply fewer people who can afford to move and set up a mobile home. Someone buying from a local mobile home dealer might work out and would be something to look into.

Outside of a dealer helping you place someone there, your lot is likely to sit idle for sometime. I suggest you reconsider and move a home onto the lot yourself.

This not only increases your odds of creating a fast cash flow, it in many cases provides you with greater control over the deal in the event that your tenant does not work out.

If you were both the landlord of the dirt and the landlord of the home (or the lienholder of the home) you would be in a stronger position in the event someone defaults or abandones the property. In most cases the control you have will afford you the ability to re-gain possession of your lot so as to return it to an income producing asset.

Chances are if your tenant owns the home and bolts, you are eventually going to have to seek possession of the home anyways. Meanwhile your lot generates no income. Why not control the deal from the start?

Sometimes taking the easy route is a long way to go.

Best Wishes,

Tony

Thanks! - Posted by luke

Posted by luke on August 19, 2003 at 12:56:35:

Thanks for the help! I found some great posts in the archives!

Re: Renting Lot w/ Sewer - Water to single MH - Posted by Luke

Posted by Luke on August 18, 2003 at 17:17:51:

I understand entirely what you are saying. Thanks for the advice, one more quick question:

Does anyone buy the land and home, but then sell just the home “Lonnie” style and keep the land as yours where after the home is paid off they keep paying lot rent? Thanks

Re: Renting Lot w/ Sewer - Water to single MH - Posted by Tony-VA/NC

Posted by Tony-VA/NC on August 19, 2003 at 10:18:40:

Yes, many people sell the home off Lonnie style and keep the land to rent forever. This is a heck of a great retirement.

While I currently prefer to rent the homes so as to sustain a long term income stream, there will come a day that I no longer wish to do so and will sell the home off and continue to rent the dirt.

Tony

Re: Renting Lot w/ Sewer - Water to single MH - Posted by Paul

Posted by Paul on August 19, 2003 at 09:29:43:

Luke,
I am no expert, but use the search function at the top of this page, put in “land home” and search. You’ll find many posts on this type of investment. To Lonnie the MH and keep the land has many advantages, take a look at the archives, you’ll learn a lot.