my question is concerning mobile home ownership on leased land where the home is placed. cons

Due to my limitations in purchasing the homes are less expensive if placed on leased lands. Need Pros and Cons. What do I need to watch out for?
In Buying Property - Asked by Christine O. - Jan 29, 2014
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Answer(s)

Michael C.
Broker/Agent
San Leandro, CA

Mobile Home or Manufactured Home. If it is a modern manufactured home they are most likely inspected by HUD inspector. will have Tags from the factory with serial numbers.
So some considerations are related to property tax
check with the Department of motor vehicle in your state about this.
If it is not permanently attached to the land it may have a motor vehicle classification and not "Real Property"
check with a tax person.
Also how long is the lease? what happens to the mobile home after the lease is up? can you get an option to renew the lease when it expires? Do you have to move it. Do you have approval from the county or city? for water/sewer connections? what about power? they usually operate on propane gas for heat & cooking and water heater.
are you paying rent to the land owner? does it include utilities?,
Are you obtaining a loan for this? will they loan if you are only leasing the land?
There are a limited number of mobile home lenders, find one, they can answer some of these questions for you. Also if it is new, the manufacturer has all this information or can direct you to resources. You can search the internet for answers to some of your questions.

Jan 29, 2014
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John H.
Developer
Trenton, NJ

depending on the term of the lease financing could be difficult.

Jan 30, 2014
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gregg b.
Developer
Carmel, IN

Certainly meet neighbors and ask questions. Ask town permitting department if all permits in place and no tax warrants on land known.

Feb 1, 2014
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Michael C.
Broker/Agent
San Leandro, CA

my biggest concern woulld be- how long is the lease? is it renewable?
if the landlord decides to stop leasing to you, what happens to the structure?
will you have to move it?
what is included in the rent? utilities?
verify that this type of unit is permitted on the land.
check the link below for additional information.

Feb 3, 2014
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Teri A.
Broker/Agent
Auburn, CA

Christine,
Can you clarify your question a little?
Are you talking a single mobile home placed on leased land (such as you find in a mobile home park?) or leasing larger lot & placing a mobile on it? In which case you need to figure out zoning restrictions for your area. In my area true mobiles cannot be placed on lots (outside of a mobile home park) except temporarily while building a permanent home or placed on a permanent foundation system- there are of course some zoning exceptions to this but they are few.
The cons with a lease is of course when it ends, you may lose any improvement dollars you put into the land and you have to move the mobile.

Feb 4, 2014
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Toby B.
Broker/Agent
Delaware, OH

As a rule, I always dissuade investors from purchasing investment properties on leased land because when things go bad, they go very-very bad.
PRO: You can purchase these cheaper than the same property with real estate. Usually, these are in locations where tenants are looking.
CON: They can be nearly impossible to finance. In the state of Ohio there is only one company that lends on detached mobile homes and they require 20% on a 5-year arm at nearly 2.5x the rate for similar investment property with land. However, my biggest issue with leased-land is that the value of your investment is at the whim of another individual. What happens if the land owner sells and the new owner wants to develop the land? You're out of luck.
I always suggest taking the higher expense route to keep the value of your investment in your own hands.

Feb 25, 2014
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Glen W.
Lender/Mortgage Broker
Atlanta, GA

I am a lender and wanted to throw this out that financing will be difficult or not impossible if the land is not owned (we would not finance a mobile home without the land), in many states financing a property would be similar to a car loan as opposed to a real estate loan. Personally I would advise you to focus only on homes with land.

Mar 6, 2014
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Barrie H.
Broker/Agent
Tucson, AZ

A mobile home that is not affixed is personal property and not real estate.

Mar 17, 2014
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