If your retirement planning includes buying a mobile or manufactured home, you are going to have plenty of company. About 8 percent of all Americans live in manufactured housing. Of those, nearly a quarter are retired.
Mobile homes are increasing well-built and attractive, and they can be a good solution for someone in need of a modestly priced home. Unfortunately, for many retirees, the financial risk outweighs the appeal.
The biggest drawback to buying a mobile home for retirement is the need to rent space in a mobile home park. Very few communities have any kind of mobile home park regulations that require landlords to maintain their properties or that cap increases in lot rents. There have been recent protests in many areas of the country over rents rising beyond what residents are able to pay.
But the biggest risk is that the landlord will sell his property to the highest bidder and simply tell residents to leave. Theoretically, mobile homeowners could relocate their units, but in practice, today's mobile homes aren't really built to be moved.
This is where Resident Owned Communities -- ROC USA -- comes in. This nonprofit organization has helped about 45 low- to moderate-income mobile home communities buy the parks where they live. It begins by organizing a cooperative of residents and helping them evaluate the value of the property, then settle on a price that is agreeable to the seller, explains Marketing Manager Mike Bullard. Then it provides a mortgage loan of up to 105 percent of value to close the deal.
Co-op members are expected to pay $1,000 each for their units. That money is usually reserved for park improvements. The ongoing lot rent is used to pay off the mortgage, Bullard says.
The co-op is managed by an elected board of residents. Over a three-year period, rent is stabilized. "We see a dramatic uptick in the way people take care of their homes," Bullard says. "They know they are there and no one is going to kick them out."
If you live in a mobile home park and worry that the owner might find an offer of sale appealing, you might want to round up your neighbors and contact ROCUSA.org.