Do you own a mobile home that you don’t reside in, but you’re not sure what to do with it? Would you like to buy a mobile home but not quite ready to move in yourself? Or do you just want to make an investment?
Well, learn how to rent out your mobile home and find the solution to your problems!
While it might not be the first option that comes to mind when you look to make an investment, renting mobile homes is an excellent opportunity to make some extra income. Nothing comes free or easy, and there are plenty of traps waiting for the uninformed owner. We are here to point them out to you and to help you avoid them.
Some of the critical aspects we’ll cover in this article include:
- The pro’s and cons of renting out a mobile home
- Costs you will need to be aware of as mobile home owner
- The rights you have as the mobile home owner as well as your tenant’s rights.
WHY YOU SHOULD LEARN HOW TO RENT OUT YOUR MOBILE HOME
Presently 20% of the U.S. population earns around or under $20,000 per year, that’s almost 60 million people! The U.S. government suggests that the average person should spend around 33% of their income on housing. That’s only $500 per month!
Where can you find a decent place to stay for that much? A mobile home!
Yes, you can find a low-cost apartment. But these are usually located in crime-ridden neighborhoods, have limited living space, face 24-hour noise and lack a sense of community. A mobile home (usually) solves all these problems without breaking the bank.
It’s easy to see why someone would choose this lifestyle (complete with a family-sized home and its own yard) over those cramped spaces provided by cheap apartments. Consequently, it should be relatively easy to keep your home leased out as long as the monthly rent is fair and the home is in good condition.
You can read all about why there exists a market for these homes here.
CAN I RENT OUT A MOBILE HOME FOR PROFIT?
A major reason for owning a mobile home is, of course, to have a home for yourself and your family to live in. However, mobile home ownership isn’t limited to those who want the place for their own residence. If for whatever reason, you’re not living in your mobile home, you may be thinking of other options to put it to good use. So, you’re wondering can you rent out a mobile home?
Actually, you’re not simply wondering if you can rent out a mobile home. In fact, you’re wondering a little more than that: can you rent out a mobile home for profit. Maybe you’re looking to have a little extra money in your pocket, so you can do a little more than just pay your bills every month. Of course, paying the bills could be the very reason you’re toying with renting mobile homes.
But whatever the reason, who doesn’t like the idea of making a profit? Renting may sound like a clear path to making money. However, you want to keep in mind that having renters in your mobile home doesn’t automatically equate to profit. It’s possible to invest in something in an attempt to make money and end up breaking even or losing money. Of course, it goes without saying most of us would prefer to make money if given a choice among these options.
DEFINE YOUR TERMS
So, for the purposes of this article, let’s establish a working definition of “profit.” Let’s say that by profit we mean the difference between how much money you lay out to rent your property and how much you make from renting your property. For instance, say your clients pay you $800 per month. But your expenses associated with the rental come out to $600 per month. In this case, our working definition leaves you with $200 in profit.
In short, we’ll say profit is taking in more than you put out in the situation.
FACTORS TO KEEP IN MIND WHEN ASKING, “CAN YOU RENT OUT A MOBILE HOME FOR PROFIT?”
As we alluded to earlier, making a profit isn’t a given. Let’s dive into some factors that can affect whether renting a mobile home turns out profitable.
WHO YOU’RE RENTING TO
First up, who rents your mobile home could make a difference. Ideal renters would treat your home like it’s their own and wouldn’t damage the home other than normal wear and tear from living.
However, consider how your renting situation could be affected if you end up with renters who:
- don’t take adequate care of the house (for example, don’t notify you when leaks occur or something breaks)
- don’t pay on time (or don’t pay the full rental amount or simply don’t pay at all)
- leave unexpectedly (expecting you to clean out the mobile home and remove furniture left behind)
- you end up having to evict (sometimes a difficult process).
To sum up, be advised that who rents your home is an important consideration. Also, as you consider renting out the mobile home consider your location – our next point.
WHERE YOU’RE RENTING
When it comes to location, there are a couple things to keep in mind.
- First, the amount you’ll receive for renting out your mobile home will vary depending on where you live. So do some research to determine what a reasonable rent would be for a comparable housing situation.
- Second, don’t forget about lot rent if your home is in a mobile home park. Unless the renter will be paying the lot rent, don’t forget to take this into account when you calculate your expenses related to the mobile home.
- Another thing to keep in mind about the location is the rules and regulations of the mobile home park. Be sure you check whether you’re allowed to rent out the mobile home. And once you figure out the answer to that question, keep in mind that you want renters who will follow the rules of the park.
OTHER THINGS TO KEEP IN MIND
Before we close this article out, let’s touch on a couple more things. When calculating your home-related expenses while renting, remember insurance, as we’ve mentioned in a previous blog post.
Additionally, if you secured a loan to purchase the mobile home in the first place, you may still have mortgage payments. In that case, take time to calculate whether your monthly rental income would cover the monthly mortgage payment.
DO YOUR RESEARCH
So, can you rent out a mobile home? By now, you know that the answer is a qualified, “yes.” Evaluate your mobile home situation including whether you have a mortgage payment and whether the home is in a mobile home park. Consider if you’ll have to pay for insurance. Run some numbers to determine if renting will actually be profitable in your case specifically. If you discover it is, take a moment to get a few more thoughts from us on mobile home renting before you get the ball rolling.
BEFORE YOU RENT OUT YOUR MOBILE HOME: PROS AND CONS
It isn’t all sunshine and roses if you are a homeowner who wants to rent out your mobile home. Make sure you consider these advantages and disadvantages before you get started:
This one is obvious, why else would you rent out your property? It is most likely that your mobile home will be located inside a mobile home park. If it is, then you are paying lot rent to the park. Your home’s rental should cover the rent and leave you with money to spare. Choosing to rent out your home at a price that covers your lot rent, means your home will be “stored” for you for free until the day you might move back in.
Because of the lower rent and a gap in income demographics, mobile homes have become popular options to rent for lower income families. It should not be too hard to keep your home occupied consistently.
Not all tenants destroy homes. If you have a responsible and decent tenant, it might be better for your home’s longevity and maintenance than leaving it standing empty. This is because all homes come under strain from the elements whether you live there or not.
A responsible tenant will most likely pick up on any faults quickly. Depending on their willingness and your contract they will fix it themselves or report the problem to you. Maintenance procedures should be laid out in the contract, especially if you consider the winter months when water can freeze inside pipes under the home. Having a tenant run water, check the thermostat and call the landlord should there be an issue can save future damage.
MOVING A MOBILE HOME IS EXPENSIVE
It costs around $4000 to transport a mobile home from one location to another. That’s a lot of money! So if you need to move with your family for work or some other reason for a few years and you’re thinking of returning, why spend all that money on relocating your house? Not quite ready to completely let go of your mobile home? Rent it out and return to your home when you are able.
Almost without exception, mobile homes depreciate in market value over time, while traditional homes tend to appreciate. Subsequently, if you rent out your mobile home with the plan to eventually sell, you might find that you’ve lost capital.
Of course, if your tenants damaged the home, the situation only gets worse. However, if you plan on living in the home, depreciation doesn’t affect you too much.
Manufactured homes depreciate around 3%-5%. Even that could be higher for the first few years after buying, just like a car. For the most part, the depreciation or (rarely) appreciation value of a mobile home can be complicated to calculate. It hinges on a variety of factors:
- The piece of land it is on
- Whether it’s permanently affixed or not
- Inflation, initial price, and current market conditions.
TENANTS AND “RENTER’S MENTALITY”
Unfortunately, having tenants can carry a stigma. “Renter’s mentality” refers to the perception that most renters do not care about:
- the condition of the home, and treat it with negligence at best
- do not make paying rent on time a priority
- do not follow all the rules and guidelines agreed upon
Many owners have been left fuming and frustrated by their tenants, especially since the law of your state may make it difficult to evict tenants that don’t cooperate with you.
The situation can become extra complicated when your home is in a park with its set of rules. You can get in trouble for the actions of your tenants, and you will be responsible for them keeping to your own and the park’s rules. It is, therefore, one of the most necessary steps to properly “size up” your potential tenants.
HOW TO RENT OUT YOUR MOBILE HOME AND AVOID THE PITFALLS
1. KNOW THE COSTS
Of course, as with any investment or business opportunity, it is wise first to do some math. You need to figure out if an investment makes financial sense, and then whether the extra effort is worth whatever profit you make.
Please keep in mind that this is not professional financial advice. We are only trying to explain the situation through some basic examples. It is recommended you hire an accountant, or have an accountant help you, to come up with a sound financial strategy.
Here are the factors you need to keep in mind when trying to calculate what you stand to gain or lose renting out your mobile home:
- Down payments: You maybe still have one on your mobile home. It might be a bit too much to expect your rent to cover a down payment too, but it will lessen its effect on your pocket. Remember it’s lower prices that draw tenants to mobile homes in the first place.
- Lot rent: If your home is in a mobile home park, you are paying lot rent on a monthly basis. Lot rent depends on the location as well as the park itself, but should not be as much as what you can ask for rent. Also find out if this includes any levies, if it does not you might want to consider asking your tenants to pay the taxes since they are staying there and receiving the benefits.
- Depreciation: As we already covered mobile homes depreciate. If you are looking to sell your mobile home, you should calculate the net profit or loss you can incur. Here is a basic example:
Initial price of home: $200,000
Depreciation: 4% per year
Resale value after 5 years: $163,074
(Remember that depreciation depends on many factors and can change on a year to year basis. You should also compensate for any potential damage to the property.)
LET’S PUT THIS ALL TOGETHER
So we already calculated the value of your home after depreciation takes its toll. Now it’s time to add the rest:
Rent per month: $600 (x 5 years = $36,000)
Lot rent: $350 (x 5 years = $21,000)
Total profit from rent: $15,000
You can then add this to your resale value, which leaves you with $178,000. In the end, the result is equal to a $22,000 loss, not very promising if you’d wanted to sell right away, which is why it’s important to do the math first. Of course, these values are for argument’s sake only and should not be taken as a real world scenario.
2. KNOW YOUR PARK RULES
Any decent park worth living in will have its rules and guidelines to make sure it is a peaceful and livable place to cohabit. You will first need to make sure that the park allows homeowners to rent out their mobile homes before you can proceed.
Additionally, you’ll need to make sure to properly inform your tenants of the park rules as well as your own. Unruly tenants may result in your eviction (a $4000 move at least).
As another example, if your mobile home park demands each mobile home owner to beautify and maintain their space and you live far away, you will need to find tenants willing to take care of the yard. Be sure to include this in the rental agreement. The same goes for noise, pets, etc.
3. KNOW YOUR TENANTS
We cannot stress the importance of this enough. Make sure that you get to know your tenants before they move in. If you feel it is necessary, you should also do a credit and financial background check. People aren’t always as they appear. It might sound like spying, but you can find out about their lifestyle on social networks.
Leasing out to a close friend or family member is not always a solution. Naturally, it will have its pitfalls when personal feelings may make it hard to enforce behavior and payments. When renting out to a stranger or someone you know, make sure they understand the rules of the contract beforehand.
4. INSURE YOUR PROPERTY
Cover all your bases in case of disaster or human error and get homeowners insurance. We strongly recommend that you request or insist that your tenants also apply for renters insurance.
Here is an example of what renters insurance is and what it covers. If your tenants are liable for any damage to property or are victims of theft, it will reduce the chances of having to pay for unexpected expenses.
5. KNOW YOUR RIGHTS AND DRAFT A LEASE AGREEMENT
Finally, you should educate yourself about your rights as a homeowner and those of your tenants. You’ll need this information when writing a contract and in dealing with your tenants after the move in. Remember to consult a lawyer who can help you create a watertight contract that will stand up in court (if needed).
There are many online articles and blogs where you can read about the rights of landlords and tenants. You should take note that there are some unique aspects when your home is in a mobile home park. You have a separate agreement with the park owners and your contract with your tenants cannot overrule or contradict it.
There are some things not set in law that your lease agreement should cover, for example:
- Rent – when it is due and what it covers.
- Service charges – e.g. electricity, gas, water. Whether these are included in the rent and how much they’ll cost.
- Repairs – who is responsible for carrying out repairs or paying for the costs.
- Ending the tenancy – how long notice needs to be given and whether it is possible to leave before the end of their contract.
- Alterations – Whether the tenants are allowed to make certain alterations (paint, wall mountings).
- Other rules – concerning guests, pets, etc.
Here is a link to the MHLTA (Manufactured/Mobile Home Landlord-Tenant Act). It mostly covers the rights from the tenants perspective, but it is easy to infer your do’s and don’t’s as a landlord.
Here are some of the reasons you are legally allowed to evict a tenant:
- Not paying rent/paying too little – You still need to request the unpaid rent from your tenant and give them some time to pay you back.
- Breaking part of the lease – Naturally, the rules in your agreement should be reasonable.
- Not complying with – Manufactured Home Owners and Community Owners Act or the Landlord Tenant Code.
- Hold-over – Staying after the lease agreement has ended without an agreement.
These are not valid reasons to evict a tenant:
- Complaints about the home (the renter is allowed to bring any issues to your attention).
- Discrimination (whether based on race, religion, sex, marital status, national origin, disability, age, or occupation).
- Children (unless they exceed your occupancy agreement).
NOW ALL YOU NEED TO DO IS FIND SOME TENANTS!
There are thousands of sites online where you can advertise your property to rent out. MHVillage is just one example. Also, ask your local classifieds about placing an ad.
If you are looking at more short-term rentals (this can be especially lucrative if your home is a favorite holiday destination), consider options like Airbnb. Airbnb is a very popular app that lets you rent out your home for short periods at a time, and it reaches a huge audience.
Remember to clean up your mobile home and yard. Listings with pictures receive much more attention, and first impressions are everything! Be honest about your mobile home’s condition and the area in which it is located. Ask your tenants over and get to know them a little before making anything official!
Voila! You are on your way to earn an extra income and keep hold of your mobile home!
HOW TO RENT A MOBILE HOME AS A TENANT
If you’ve never lived in a mobile home before, you might be wondering what’s so different about it and what makes it different than renting an apartment, condo, or piece of real estate. We’ll show you the differences (and the similarities) by running you through the entire lifecycle of a mobile home tenancy. In the end, you might see that renting a mobile home is not so different at all and that you are just as protected by the law as any other type of housing.
Renting a mobile home | What are your options?
There are three basic ways in which you can rent a mobile home to live in. By far the most common options are either to rent a home and a lot within a mobile home park directly or to rent a home owned by someone else within a mobile home park. As many as 34% of new manufactured homes are placed in communities and out of the total, most homes are located in them.
The other option is to rent a mobile home on private property. It will be up to your particular agreement whether you pay rent for the actual property as well, although this is usually the case. For various reasons unique to the manufactured home industry, this is much rarer, although it could still occur.
There are some generalities that apply to each type of mobile home rental. However, you should always refer to the landlord-tenant act of your state. (Here is an example of the Washington state version.) And don’t forget to consult your lease agreement for specifics. We will make sure to mention where differences apply depending on which type of rental you have throughout the article.
HOW MUCH TO RENT A TRAILER HOME or a Mobile Home?
Before you even look at what it means to live in a rented out mobile home, you probably want to know how much it costs and whether you can afford it. The main advantage that mobile home living enjoys over real estate, apartments, and condominiums, is its relatively low cost. Rent for both the mobile home and a lot within a park could be as little as $300 to $1,000 in most cases.
Lot rent various anywhere from $200 to $700 and the rent for homes is anywhere between $300 to $700. This may seem unbelievably low. However, you should remember that a new mobile home typically costs between $30,000 to $70,000 and a second-hand one between $15,000 and $50,000. This is a far cry away from stick-built homes that cost hundreds of thousands.
In the same vein, apartment rental in the U.S. averages out to about $1,200 per month. This means that renting a mobile home in a park works out to roughly half of renting in an apartment. Add to this the fact that mobile homes come with way more space and privacy, and you can see why they are becoming increasingly attractive.
Depending on your community, there could be other levies or fees for the maintenance or operation of the park and its facilities. Extra services like cable TV, internet, and utilities may also be billed separately.
The lease agreement
The first thing you should check when moving into a mobile home park is your lease agreement. This document not only guarantees your rights as the tenant but also your responsibilities. Without a proper lease agreement, things can get very gray. You may run into issues regarding your situation in the home and park. Furthermore, the lack of an agreement may be cause for serious doubt about the legitimacy of the park or owner.
The first thing you should do is to compare the lease agreement to your local Manufactured/Mobile Home Landlord Tenant Act to see if its clauses are legal. At the very least, your lease agreement should mention or make provision for the following:
- All the fees associated with living in the park and the services provided
- Information about the landlord
- The term of the lease agreement
- The maintenance responsibilities of the landlord/tenant
- Any rules of the mobile home park
- How deposits and refunds are handled
- Notice periods for moving out/being told to move out/rental increases/decreases
- How increases in rent are handled
- The future of the park
- The wind/weather zone of the park
- Any fees or rules relating to guests
A landlord should provide it to you with ample time to go through the lease before you move into the property. Never get rushed into signing a lease prematurely! The protection of the landlord-tenant act only goes so far. Being caution upfront could help you avoid a lot of unnecessary trouble in the long run.
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Checklist for moving into a mobile home:
Depending on how the property is managed, you may only have a single inspection of the property and meeting with the landlord. Or you may need to meet multiple times. Regardless, you should cover all of the following before moving into a new rental mobile home and upon signing the lease agreement.
- There are no remaining health or safety concerns.
- You have been handed the keys to the home.
- You have been provided with an inventory of the property and have verified it with the landlord.
- The property is in a properly clean and hygienic state.
- All the utilities are properly connected and the electricity and water are running. If the home is fitted with a prepaid meter, you know where it is and how to operate it.
- Make sure that the furnace, water heater, and/or HVAC system is working correctly.
- You and the landlord have gone over the lease together and agree on its contents.
- Note any damage in the home so that it doesn’t come out of your deposit when you move out.
- You can also have the home inspected for HUD compliance.
- Pay the security deposit as well as the first month’s rent.
Settling into your home
- Change the locks: Although this isn’t a must, most parks are OK with you changing the locks when you move into the home. You can sleep that much more worry-free knowing that no one else may still have keys to your home.
- Meet the neighbors: One of the great advantages of mobile home parks is that most have a community feel to them. Your children can play safely with the neighborhood kids and you can form a real community with all your neighbors. Check if your park has any interest groups where you can get together with like-minded individuals and meet new people.
Living in a rented mobile home
Mobile home park living
There are over 40,000 land lease communities across the U.S. They are located in all states and in or near all major cities. That alone means that the conditions, cost, and laws of mobile home parks can differ significantly across the board. Each mobile home park is unique. Hopefully, that means you’ve taken the time to really look for a mobile home park that’s a good fit for you and your family.
Parks can offer all kinds of amenities now; from pools to barbecue areas to clubhouses. There are even mobile home parks on the waterfront with their very own boat clubs and marinas. Usually, mobile home parks are also located outside of the busiest parts of the cities which means you get to experience some more fresh air and be closer to nature.
Make sure to find out if your mobile home park has any community meetings or groups that discuss tenants’ issues or where people meet to discuss general living inside it. By law, the landlord may not stop the forming of these groups or disband them. It could be a great platform to have your voice heard and to solve issues together as a community.
Upkeep and maintenance
When it comes to the upkeep and maintenance of your mobile home, there are a lot of similarities and a lot of big differences between it and a stick-built home. Generally, maintenance for mobile homes is much cheaper and easier to DIY.
However, you should still be aware of the differences between manufactured homes and stick-built homes if you want to attempt some DIY projects and make sure you are comfortable working with the different materials.
Generally speaking, tenants are responsible for most of the upkeep of the home when it comes to the interior and superficial features of the exterior. However, what really is whose responsibility should be laid out in your lease agreement. Some of the common things you might need to learn to do are:
- Use caulk to fix cracks or slight damage in the walls.
- Do some minor electrical work (major work should be covered by the park).
- Protect against and avoid water damage.
- Replace broken windows (if it’s your fault).
Although it might not fall under your responsibilities, it can’t hurt to take care of it yourself (unless otherwise stipulated in your lease agreement). Remember, this is your home for the near future and small problems can quickly spiral into bigger ones.
The maintenance of the park grounds and its amenities are generally the landlord’s responsibilities. (It’s also stated as such under the landlord/tenant act.) You shouldn’t have to worry about it.
Sprucing up your home
Many people still live with the outdated mindset that you can’t upgrade or renovate a mobile home and that, even if you want to, it’s not really worth it. Nothing can be further from the truth! There are many cost-effective ways to beautify a mobile home on the inside and outside and it’s never a bad investment to improve you and your family’s living conditions. Even if it is a temporary home.
Once again, you should always refer to your lease agreement about what’s possible or not. However, generally, any aesthetic upgrades that improve the home and doesn’t affect its HUD compliance or can easily be redone is fair game. Some of the things you could do are:
- Upgrade your kitchen cabinets by installing new ones, replacing the handles, or painting/treating them
- Paint the interior or exterior
- Replace the skirting
- Install eaves
- Replace the window or door frames
- Replace the superficial flooring
- Install new storage units
- Replace the appliances
- Install floor strips, ceiling strips, etc.
- Replace the windows
- Landscape the yard but don’t overdo it. Your landlord won’t be happy if you create a landscape that’s very hard to maintain or requires a lot of water.
Be especially careful about doing things like hammering in nails or fixtures to hang things on your walls. Just like with other rental units, your landlord might not be happy to see them once you take your things down. Luckily, this is an easy fix with some caulk and the original paint.
Reasons to move out
Whether you or your landlord calls it quits in the end, there are still some formalities that must be observed to part ways legally and on good terms. The following guidelines should usually be followed (depending on your lease agreement and local landlord/tenant act):
- The park shuts down: Parks are often bought out for other developments. In this case, the landlord must provide tenants with at least 3 to 12 month’s notice (it could even be 2 years).
- Moving out before your lease is up: You have to give your landlord at least 30 days notice. Also, he has the right to not waiver your remaining monthly rental until the end of the agreement or until a new tenant is found.
- Moving when your lease is up: You still need to provide the landlord with sufficient time to find a new tenant if you will not be renewing your lease. This is usually 30 days. The same goes if the landlord does not want to renew your lease but in most cases, you need to be given 90-days notice.
- You are being evicted: Depending on the reason, the landlord could legally evict you in anywhere between 5 (for not paying rent) or 15 days (breaking park rules or committing a crime).
Moving out inspections
There are also multiple steps that must be observed when moving out of a rented mobile home. When either of you signals the intent to end the tenancy, the landlord needs to provide you with a notice and ample time to prepare for an inspection. At this first inspection, the landlord will check for any damage or wear and tear. If there is anything you should fix, he should describe it to you and make sure you are notified of it.
The landlord will then give you time to repair the damage before a final inspection. At this inspection, he will note the remaining damage, you will go through the inventory list together, and you will formally end the tenancy, handing back the keys.
The landlord then has two weeks to use the deposit to repair any remaining damage before paying it back to you within 10 days.
Get ready to rent!
That’s it from start to finish for renting a mobile home. As you can see, the process looks very similar to any other type of rental situation. The main difference is in the unique features of a mobile home and a mobile home park. Be sure to choose a park that takes the laws and rights of the tenant seriously, and you should have a fantastic experience.