Have you ever wondered, what are the advantages of living in a resident-owned mobile home park in Sarasota?
Are you curious as to what the differences are between a resident-owned mobile home park and of a traditional park?
I understand, this gets pretty confusing if you’re not familiar with it!
Are you ready to get those questions answered?
When looking at buying a mobile home you will first need to determine if you would like to buy the home and the land that the home sits on, or if you are okay with buying the home and renting that land.
There are pros and cons to each decision here.
A Resident Owned Community (ROC) mobile home park, is a park owned and managed by a non-profit corporation formed by the homeowners. It is also called Cooperative, or in short, Co-op. Each member of the Co-op is part owner of the park and the land where each house sits. There are many benefits of living inside ROC park compared to those owned by a single person, family, or company.
If you are looking to buy the home and the land, then you will be living in what is called a co-op mobile home park, which is resident owned. Within these parks, you do not have lot rent each month since you own the land the home sits on, but will still have a monthly HOA payment that will cover the cost of the upkeep of the common areas and the amenities the park offers. The main positive about going this route is that since you own the ground, you can benefit from the land appreciation, just like a regular stick-and-brick home. Now, the downside of buying both the home and the land is that the initial costs will be much more expensive than that of a land-rented home. Many times being about three to four times higher.
If you’re looking to not spend as much money on your initial purchase, then looking at a traditional mobile home park where you buy the home and then rent the land will be a better option for you. In this scenario, you will be paying a monthly fee to the park for renting the land, this payment is called lot rent. This lot rent will help cover the cost of the upkeep of all the public areas, amenities, lawn mowing, and oftentimes additional utilities for your home, such as water, sewer, and trash pickup. Expect lot rent to increase 3% to 5% per year. The con of buying in a traditional mobile home park when you don’t own the land is that you will not benefit from the land appreciation when you go to sell your home.
When looking at which option to go with, I have learned it is up to the buyer and how long they plan to live in that home.
If they are looking to own the home for several years, then spending more on the front end to buy the land and the home may be a good idea as over time that monthly lot rent can add up fast. On the other side, if this is a few-year adventure, or if the buyer is not sure how buying a mobile home in Sarasota will work for them, then buying at a traditional park may be a better way to go as the initial buy-in is far less.
Having said that, a ROC mobile home park has many advantages over a traditional park. This includes but is not limited to.
- Control of monthly lot rent, community repairs, and improvements;
- Lifetime security against unfair eviction;
- Liability protection (Members are not personally liable for association loans.), and a strong sense of community.
- Everyone has a say in the way the ROC is run, and major decisions are made by the democratic vote. Members elect a board of directors, which appoints committees to carry out various tasks and manage the day-to-day operations of the organization.
Why ROC is different?
In a commercially owned mobile home park, the owner controls the lot rent and the residents cannot do anything about it when the owner decides to increase the lot rent based on factors outlined in the prospectus. The owner also has control over the condition of the community – including roads, water, electricity, waste-water systems, and landscaping.
Each time the park is sold to a new owner, the rent is likely to increase. With the ever-increasing lot rent, the theory is that, if you don’t agree with how the park is managed, or if you can’t afford the lot rent, you are free to move your house somewhere else. This is a problem for many homeowners though as aside from the massive cost of moving, it is also become difficult to find land to where you can transfer your house.
When looking at purchasing a mobile home in the Sarasota area, it is important to know what type of park you are looking at prior to shopping within it. Knowing if that park is a co-op resident-owned park or a traditional park will help you greatly in knowing exactly what you were looking at when viewing the mobile home for sale.
This is Mark Kaiser with The Mobile Home Dealer and we help mobile home buyers and sellers get to a better place in life.