How to determine value of a resort lot+mobile home?

[Powerstroke]

My wife and I are considering buying a mobile home ona resort lot up north. I know what the resort is charging for lot rental and that is fine, but I'm wondering how to value to mobile home and its ammenities.

Should some sort of real estate person look at it? Is there a way to compare similar properties? We weren't actually looking for something like this but I know the sellers and it seems like a good deal and possibly a good investment.

[bobberal]

You can never consider a seasonal or a trailer as an investment. If the resort is what you are looking for and provides you with the amenities you are looking for then go for it.

I recently sold my trailer on a best lakeside lot at a very nice resort. The trailer booked out at 10 K. I sold it for 17K because he person wanted the lakeside lot.

Supply and Demand at its best.

[Powerstroke]

I certainly don't believe it to be a nest egg type investment. I was figuring we'll enjoy it for a few years, maybe make a few improvements and then sell it again, hopefully when there is a bigger resort boom going on. The big thing for me is having a 4-season place to sleep when I go up north. Right now we stay in my buddies parents RV.....its an early 70's C-class. Not much room and the furnace don't work.

[Bigbartguy]

this is a good way to get cabin amenities w/o the $1000/month cabin payment. You wont have the appreciation etc, but it's a great way to get on a lake and have a weekend getaway for MUCH less money. (and much less work, ask me how I know)

it really is about supply and demand. Your best valuation would be what other similar campers sold for in the exact resort you are looking at. I doubt there are public records to review so you'd probably have to ask the resort owners...if they are good people they should be straight w/ you (if they even know the prices, they may not).

Best of luck

[MuskieJunkie]

I was looking at some on Leech a few years ago, there was a guy trying to unload a 40' that needed a lot of work for $1,500, I think there were some up to $10k. My dad bought a 40' in nice shape about 5 years ago for $8k. I think there are book values on these just like cars.

[picksbigwagon]

on a side question, what would a yearly rental lot rate be? I know, 10 million lake resorts, but ball park are we talking 2-3K? for Mille Lacs or vermillion or leech?

[Powerstroke]

This one is on Farm Island Lake just minutes north of Mille Lacs and they charge $2K /year for the lot. Seems pretty consistant.

The one I'm looking at is a 45'x10' with an 8x10 addition. It also has a deck and large shed with power. Electrical is the only utility that needs to be paid for......and sattelite if you want it. They want ~$30K for the works.

[MuskieJunkie]

If I am reading all these posts correctly you have to pay off the previous tenent so that you can rent the lot??? In Bob's example it looks like taking over the lot rental cost a guy $7k (on top or buying the trailer). The lots would have to be in high demand for prices like that. When I looked at them on Leech takeing over the lot rental was not worth anything. And the resort owner could not renew your lot lease, then you are out. I don't get it.

[computerboy]

Powerstroke,

What you're really paying for is the option to lease the lot that the mobile home is sitting on. It's not uncommon for a mobile home to sell well above it's book value in these types of developments, particularly if it's sitting on a highly sought after lot (e.g. lakefront). If the current owners tried to sell the mobile home itself without the option to lease the lot, I doubt they could get half of their current asking price.

As far as comparables go, the best way to know is to see what others are selling for in that development, or ask other owners in the development what they paid for theirs (if they are willing to divulge). Since you know the sellers, you would hope they would answer you honestly if you asked them about comparables in the development.

Before you sign on the dotted line though, there are a few things to consider:

1. Financing:

The best way to purchase a mobile home is to pay for it outright. Many lending institutions refuse to finance mobile homes due to the high risk involved. Those that do finance them often charge rates that border on criminal. Many often include pre-payment penalties that are so prohibitively high that it forces you to stay in a high-interest loan. If you don’t have the cash, consider taking out a home equity loan to pay for it, or write up a contract for deed with the seller. If you do finance it, make sure you understand all the terms of conditions of the loan.

2. Mold

The majority of mobile homes built before the 90's were poorly constructed and are notorious for mold. If this mobile home is 10+ years old, I would strongly suggest getting a thorough mold inspection.

3. You are a renter, not an owner

The greatest risk in developments where you don’t own the land is that you are completely at the mercy of the landowner. If they decide to sell the resort, there is no guarantee that the new owner wants to have leased tenants. If they don’t, you’ll be forced to relocate your mobile home which could be a costly endeavor. The current owner can also dramatically raise lot fees, or change regulations on a whim.

Bottom line:

Owning a recreational property in a PUD is a very affordable way of enjoying all the benefits of lake living, plus resorts amenities, with almost none of the work. This type of property would probably be an ideal fit for you and your wife, and will likely meet all of your requirements and more.

Good luck!

[Homeland]

You might want to look into a "common interest community". Up in our neck of the woods there is one, for example, that you can buy your lot for as cheap as $26K and then move in your own RV.

This way you can build equity on the lot (you'll actually own it), have all the amenities of a first class resort, and obtain financing much easier.

Let me know if you need help.

[MuskieJunkie]

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What you're really paying for is the option to lease the lot that the mobile home is sitting on.

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How long of a lease do you usually sign in a situation like this?

I would be very leary of paying a lot of money to be able to lease something. Once that lease is up you have no rights to anything (except of course the trailer which you would have to pay to move).

[computerboy]

The lease (aka lot fee or lot rental) is paid on an annual basis. You'll pay anywhere from a few hundred, to several thousands of dollars a year depending on the amenities provided and your proximity to the water. But yes MuskieJunkie, you are assuming a fair amount of risk in leased lot developments. The land owners could sell it off to some hot shot developer who plans on building luxury waterfront condos. Guess where that leaves you and your mobile home?

If you're still wondering why anyone would want to assume that risk, it's primarily a matter of price. Leased lot developments are much more affordable to get into because you're only paying for the mobile home. With owned lot developments (aka shared interest communities) you have the additional cost of the lot. On highly sought after lakes, you're looking at 50K on up just for the lot. Add a decent mobile home and you're pushing 100K, plus annual association dues. While 100K is still quite a bargain for lakeshore living, it's not within everyone's budget.

Good luck with your search.

[MuskieJunkie]

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The lease (aka lot fee or lot rental) is paid on an annual basis. You'll pay anywhere from a few hundred, to several thousands of dollars a year depending on the amenities provided and your proximity to the water. But yes MuskieJunkie, you are assuming a fair amount of risk in leased lot developments. The land owners could sell it off to some hot shot developer who plans on building luxury waterfront condos. Guess where that leaves you and your mobile home?

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Wow, 1 year, the risk is much more than just a developer coming in. You have no legal rights to renewing that lease, the owner could easily say "no I am not leasing to you again" (for example another guy is paying him $10k to lease it) and you are out in the cold. I would geuss most resort owners will shake your hand and renew your lease for years and years without it being a problem but from a legal standpoint you are paying all that money for just the one year lease.

[Powerstroke]

Mostly cause I decided against the idea (too impulsive), but quite a bit because of the arguments made here, I'm not considering this purchase. Thanks for all the info and insight.

[caughtacase73]

I have also been curious about a vacation set up like this. I was under the impression that you purchase the lot (usually small lot size 40'x80' or so) and that the annual costs are like association dues. A cite around the Pequot Lakes area is going for around $7500.00. I found this on a realty HSOforum. Some of the sites are emply and some for sale have a camper or trailer on them and are priced accordingly. The $400.00 annual dues pays for utilities (electric, sewer, and water) and also gives access to the resort amenities such as pools or play areas for the kids.

I am sure there are covenants that dictate size of camper or trailer, size of deck, and number of outbuildings. Maybe I need to do more research to fully understand the legal arrangements.

[computerboy]

The property you mention in Pequot lakes sounds like a shared interest community where you actually own the lot. As a lot owner, you would have a percentage of interest in the entire property. You pay an annual association due, and are required to follow the covenants, rules, and regulations of the association. These types of properties are more attractive to some buyers because you have legal rights as an owner, enjoy appreciation on the land you own, and a say in what happens to the property and the association rules if you are on the board. These types of developments also tend to be more intimate as all of the people that reside there are owners, not just renters.

The main thing to consider in these developments are the covenants and restrictions. For example, these are some questions that I would have:

Can I have a fire? If so, can I use my own fire ring or do I have to use a special kind of firebox?

Can I have a deck? If so, how big? Can I build it myself, or do I have to have an authorized contractor build it?

Does the lot include a designated slip for a boat? Do I have the option of having additional slip space?

Am I able to sell it on my own, or do I have to use a designated realtor?

Can I access my trailer in the winter? If so, will it have power and/or water?

Are there quiet hours? If so, how are they enforced?

If you have a problem owner, how does the association deal with them?

Is there parking space available for my boat trailer?

Are ATV's or snowmobiles allowed on the premises?

How many parking spaces do I have? Is there additional parking available?

These are questions that I would ask, but you should think of all the things that are important to you and make sure it will meet your needs. The most important thing is to not assume anything. Carefully read all of the rules, regulations, and covenants. You may find that something very important to (e.g. flying a flag) is not allowed.

[MuskieJunkie]

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Mostly cause I decided against the idea (too impulsive), but quite a bit because of the arguments made here, I'm not considering this purchase. Thanks for all the info and insight.

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I am glad to hear that. Paying to take over a 1 year lease is not a good idea, in my opinion.