Pros and Cons of Mobile Home living (San Diego, San Jose: for sale, real estate)

[HDL]

I'm considering buying a Mobile Home in this area (SJ, Mtn View, Sunnyvale, etc.) and am concerned about being able to sell in the future and also about space rents, etc. I'm hoping to get some feedback from posters who are currently living in a MH park or who have recently sold and to get your perspective on the issues that you have.

Here is the type of info that I'm looking for:

1) Names of safe, clean parks and web links
2) Any rent controlled parks
3) Laws that limit space rent increases
4) How to find out if the park is a candidate for sale or foreclosure
5) Parks that have garages

TIA

[eriann123]

Originally Posted by HDL

I'm considering buying a Mobile Home in this area (SJ, Mtn View, Sunnyvale, etc.) and am concerned about being able to sell in the future and also about space rents, etc. I'm hoping to get some feedback from posters who are currently living in a MH park or who have recently sold and to get your perspective on the issues that you have.

Here is the type of info that I'm looking for:

1) Names of safe, clean parks and web links
2) Any rent controlled parks
3) Laws that limit space rent increases
4) How to find out if the park is a candidate for sale or foreclosure
5) Parks that have garages

TIA

Yeah. I'm wondering about mobil homes deal? In San Diego I've been looking at $600 to $800 per month, and you never own the land and the mobil home never go up in value or do they? It's just like paying rent but little better than living in an apparment.

[mstnghu2]

A few years ago I was actually considering a mobile home for a starter home. Fortunately, a good friend of mine who's a real estate broker steered me away. While some of the newer ones can actually be pretty nice and may not even look anything like a trailer, there are many drawbacks. Mainly, the appreciation is terrible. They don't hold value at all and at least in this area, their value has dropped considerably over the last few years.
The other problem is that you never own the land it's on and you have to pay rent, which can be as much as renting a small apartment. You can't just up and move it either, even though you technically own it. I've also heard of some mobile home park owners selling the land right out from underneath and the mobile home owners don't really have many options of what to do at that point.
If you owned a piece of property somewhere and wanted to put a manufactured home on it, that's a whole different story and wouldn't be a terrible idea at all.

[mysticaltyger]

^^^^What mstnghu2 said. In the Bay Area, I don't see the advantages of mobile homes (a little more space, I guess). But it seems to me you get all the disadvantages of home ownership (maintenance, etc) and none of the advantages. Not worth it, IMO.

[Luke9686]

There really are no advantages to buying a mobile home in the Bay area. First, lot rent alone is usually over $1,000 per month. Plus, the mobile homes in the area usually run at least $100K, usually over $150K. You'll see no appreciation, because they aren't considered real estate. Title is transfered by the DMV. I doubt you'll find anybody to finance the mobile home without a huge down payment, if at all...

[AlvisoRocks]

HDL - I'll be the lone one to chime in and say that buying a MH might be a good option if:

A) You don't like living in apartments or condominiums and sharing walls
B) You can't afford a stick built house in the neighborhood(s) of your choice
C) You still need a tax write off - mortgage interest on a mobile home is tax deductible, as are the property taxes if your home has been converted to real property vs. a titled vehicle through the dmv
D) You want to paint your walls whatever color you want
E) You want the opportunity to pay off something sooner than 30 long years
F) You want to own but not be buried over your head in a huge mortgage, if buying a stick built house would bury you that way.
G) You recognize that you may lose some of your money upon selling if your mobile has not been kept in tip top shape. Even so, if you're willing to lose some money vs. 100% by continuing to rent, then a mobile might be good.
H) You want some amenities like a pool, clubhouse, workout room etc. Many parks include amenities for residents.

Parks:

Check crimereports.com and click the sex offender box - you'd be surprised at how many sex offenders reside in some of the parks. Fortunately, the park I am in, has zero sex offenders

San Jose parks have rent controls capped at 3% per year. Prop 13 on the other hand caps property taxes on real estate at 2% per year. I currently pay $602 in park rent. Some parks are sky high, as said before, approaching $1000 or more.

Better deals are to be found on older mobile homes than on newer ones. I will be remodeling mine completely, top to bottom, and will still only have about $100-120k total into it, including my purchase price, for about 1550 square feet of living space.

For financing reasons, absolutely stick with 1976 or newer as they were built to HUD specs.

For more info, look through mhvillage.com and also Mobile Home Repair - a great mobile home owner d-i-y forum/website.

[treedonkey]

Originally Posted by HDL

Here is the type of info that I'm looking for:

1) Names of safe, clean parks and web links
2) Any rent controlled parks
3) Laws that limit space rent increases
4) How to find out if the park is a candidate for sale or foreclosure
5) Parks that have garages

There are several parks in each of the area you specified, so you'll need to do research on just where you want to live and then start narrowing it down from there based on park rents, facilities and other things. Very few realtors know much about MH parks (though they all claim that they do) but I actually know a very good one that helped us buy and later sell our place successfully. If and when you're ready to get serious send me a DM and I'll send you his name.

I lived in a MHP in North Sunnyvale for over 7 years until I sold it about a year and a half ago before moving away, so I feel that I am a qualified expert here. I will objectively tell you the pro's and con's as I see them and then you can decide for yourself.

PROS
'Affordable' Homes: Meaning, it's possible to buy a brand new (or near-new) 1500+ sq. ft. home for under $200k in the heart of Silicon Valley with amenities like vaulted ceilings, insulated floors and moderately upgraded finishing... These are all things that would drive a regular single family home of similar size up near the 1 million dollar mark or higher, even in the current market.

Great Location: Many of these parks are located near the northern end of the valley where a very large percentage of high-tech companies are located, so it's possible you could work at someplace like Google, NetApp, Cisco, or NASA and be within easy biking or even walking distance of the office. Several of them also have immediate access to both freeways AND open space (along the Bay) which is very rare in the Bay Area.

Clean, Quiet and Safe: Most of the parks are kept very clean due to a lot of homeowner regulations (also see cons) and do not feel like your typical trailer parks. They are very quiet because even in a larger park with upwards of a thousand units, there is a relatively small amount of traffic through the area because of course there are not thoroughfares through an MHP. Also crime was almost non-existent for the 8 years I lived there.

Detached Living: You will have your own driveway, a carport, no shared walls, your very own shed (or even in some parks, an enclosed garage), and your very own microscopic yard... a place to bbq at least. It may seem silly but if you've lived in the bay area you know that all means a lot.

Sound Good? To good to be true? Perhaps it is. Just read the cons and decide for yourself...

CONS
High Interest Loans: Loans are very risky for Mobile Homes since they can technically be moved and are often walked away from due to their relatively low cost. So there are few companies that offer them, they can be harder to qualify for than some jumbo loans, and the interest rates are very high, talking 8-10% fixed in most cases.

High Rent Spaces: When we moved in in 2001 the average rent in our area was about $700/month. By the time we sold seven years later we were paying right around $900. True, park rents are controlled or quasi-controlled in most areas but that doesn't mean they don't go up. In fact it means they are guaranteed to go up, but at a set rate every year. In our case, that was $22 a year which doesn't seem that high but it adds up and, guess what, when the economy plummets, rent still goes up. Nice. Also, there is no guarantee that rent control will always hold since laws and zoning regulations change and you are living in a privately owned community so owners can ultimately do whatever they want. Expect to pay about $2000 (or more) a month between mortgage and rent if you have to fully finance a home in the $150k-200k range.

Poor Appreciation: Mobile Homes really don't appreciate much, if at all. Even in the boom, folks I knew were looking at $30-50k of appreciation after 3-5 years whereas home, townhouse and even condo owners were often looking at appreciation rate into the 100's of thousands over the same time period. In our case, we sold in Summer 07 at the beginning of the real estate slump, so we considered ourselves fortunate that we only had to take a net loss of about $25,000 after depreciation and sellers fees. We did get some of that back in taxes and we had most of the house paid off already so it didn't exactly ruin us, but it was annoying.

Oppressive Management: Of course this varies by park, but most of the nicer ones are that way because the management has a huge list of do's and dont's that they try to enforce with threat letters and even personal visits and nasty words. The park we were in was notoriously bad for this because we had a manager who was universally reputed as evil incarnate, and she was ultimately the reason that we left when we did. I know that she died about six months ago, so perhaps things have improved since then. I will give you the name of that park if you DM me about it so that you can be extra cautious if it comes into consideration.

SO the question is, is it worth it or not? Of course, that's up to you. Despite all the cons, for us it was a good place to be for several years and we might still be there if things had not transpired as they did in our personal lives. The real problem is just the cost of living in the Bay Area. For all its obvious flaws, if I had it to do over again, I would still opt for a mobile home (in a different park) over an obscenely overpriced cardboard box that is poised to drop 100's of thousand of $$ in value before you can pound a For Sale sign into the front yard. Even with the depreciation that we had to eat and all that we paid in rent, it worked out to be about even with what we would have paid to rent a dingy old apartment for all those years. So to me it was worth it but I'm glad I got out when I did. <phew>

[sonarrat]

I ran the numbers last summer because I was curious, and found that a $50K crudbox mobile with a $1000 space rent in the Bay Area has a similar cost profile to a $180K condo with a $300 HOA. They'll use the same guidelines of debt to income ratio but also factor in the space rent; and since you can't get FHA financing with a 3.5% down payment, you have to put a similar amount down too. But you get all the downsides that treedonkey laid out. It doesn't make any sense.

[treedonkey]

Originally Posted by sonarrat

I ran the numbers last summer because I was curious, and found that a $50K crudbox mobile with a $1000 space rent in the Bay Area has a similar cost profile to a $180K condo with a $300 HOA. They'll use the same guidelines of debt to income ratio but also factor in the space rent; and since you can't get FHA financing with a 3.5% down payment, you have to put a similar amount down too. But you get all the downsides that treedonkey laid out. It doesn't make any sense.

Good numbers, except I do disgaree to some extend that it doesn't make any sense. If you're sitting on a pile of cash, like say the $100k that you would have to put down to get a real house with a reasonable interest rate, than it could make a lot of sense to just buy one outright and pay the rent and not worry about it (I forgot to add LOW MAINTENANCE to my list of pro's). On the other hand if you are single or don;t mind cramming your family into the kind of place you could get fro $180 k (I have no idea what you could possibly get for that though) then obviously that is a much more equitable way to go in the long run.

[sonarrat]

Originally Posted by treedonkey

Good numbers, except I do disgaree to some extend that it doesn't make any sense. If you're sitting on a pile of cash, like say the $100k that you would have to put down to get a real house with a reasonable interest rate, than it could make a lot of sense to just buy one outright and pay the rent and not worry about it (I forgot to add LOW MAINTENANCE to my list of pro's). On the other hand if you are single or don;t mind cramming your family into the kind of place you could get fro $180 k (I have no idea what you could possibly get for that though) then obviously that is a much more equitable way to go in the long run.

Given $100K cash, I'd get a land loan and toss an old mobile onto it from wherever. It would still be a better use of the money.