Park owners can increase lot rent per year but there are rules to follow. In this article, I will explain to you how much lot rent can increase in Sarasota so you can take a look at your financial conditions before jumping on the bandwagon.
One of the biggest questions we get on a regular basis here at The Mobile Home Dealer from mobile home Buyers who are new to the mobile home space is, “how much can the lot rent increase each year?”
Mobile homes on leased land in the state of Florida are viewed as and taxed as motor vehicles as they have a title associated with the purchase and not a deed. The reason for this is that when a Buyer buys a mobile home on leased land they are physically buying the home and not the land the home sits on. Each month a fee will need to be paid to the mobile home park which is referred to as lot rent.
Lot rent is the payment that is paid to the park each month for the usage of the land the home sits on. Many parks throughout the Sarasota area also include the home’s water, sewer, trash, lawn care, and usage of park amenities within the lot rent bill that is collected each month.
Most new mobile home Buyers view this not really as a lot of rent fee but more of a condo association due as most mobile home parks make a mobile home a turn-key living experience where the only thing that is needed to be taken care of is what is inside the home as much of the exterior upkeep on the property is included in the monthly fee.
Since most lot rents include additional fees such as the cutting, blowing, mulching, and upkeep of each tenant’s landscaping then it would be reasonable to expect that the lot rent would then increase each year to keep up with the price of inflation. The cost of groceries, fuel, and other items increase ever so slightly year after year and since many times additional services are included in the lot rent then it would be reasonable to see the lot rent increase to reflect this.
In the state of Florida, it is required that if a mobile home park lot rent is to increase then the owners of the park must give all of the residents a 90-day notice of the increase. Many times this is done through mailings directly to each resident’s home stating what the new lot will be and why it is increasing.
Most mobile home parks in the Sarasota area increase their lot rents each year around the first of the year so expect to see this letter come to your home sometime in the mid to late fall if the lot rent will increase.
What we at The Mobile Home Dealer continue to see year after year is that mobile home park lot rents will increase somewhere around 2-3% each year in order to match the national level of inflation. What this means is that if the lot rent is $600 now then it would be reasonable to expect that next year’s lot rent will be around $620 or so.
While the cost of lot rent is certainly due to increasing each year there are certain parks that will only increase the lot rent every few years. The reason for this is that many times these parks fail to accurately track inflation and will over-increase the lot rent one year only for the following year to remain the same so that the increase equals out over the following year.
When looking at buying a mobile home on leased land throughout the Sarasota Florida area we always suggest looking at your income now and asking yourself if will it increase over the time period where you are looking to own the mobile or if will it stay the same. Once this is determined we suggest next asking yourself how long you see yourself living in the mobile home. The reason for both of these questions is to better prepare yourself from a budgetary standpoint to decide how long you will be able to comfortably afford the mobile home parks lot rent so that you are not in position years down the road where you can’t afford it.
Unlike conventional house rentals, lot rents on mobile home parks are mostly non-negotiable and are applicable to every affected mobile homeowner living inside the park.
Another thing to be aware of is that mobile home park owners cannot increase lot rent for just any reason and must only follow what is written in the prospectus. However, there is also no law that prohibits park owners and mobile homeowners from agreeing to lot rental increases based on factors not disclosed in the prospectus. So, if the park owner increases the lot rent for a reason not disclosed in the prospectus and the homeowner agrees, there will be no issue.
It is always advisable to know the reasons why the park owner is increasing the lot rent and whether the factors are enlisted in the prospectus or not. If not, try to discuss it with the park owner.
This is Mark Kaiser with The Mobile Home Dealer and we help mobile home Buyers and Sellers get to a better place in life.