A tale from the trailer park
November 15, 2006
A month ago, Rory Bloom was discontent and stuck in a financial trap that has caught many low-income workers: home equity loss in a trailer park.
He and his girlfriend, who are expecting their first child in April, live in a 1961 single-wide mobile home. Bloom bought it for $8,500 in October 2002.
Today it’s worth nothing.
Since the owner of the mobile home park plans to tear down the homes and build town houses, they need to get out. Moving the trailer home isn’t an option. Because of its age, Carson City and surrounding counties won’t accept it.
This is a problem for lower-income families who can’t afford the rent and deposit on an apartment. The high cost of living in Carson City, where Bloom works, and his low salary, keep him in cheaper units on rented land. This is an option that financial counselors say builds no equity.
The day I met Bloom he wore a T-shirt with a picture of a mobile home on it. “Home Sweet Home” it said. He’s an amiable guy who seems to work hard but still doesn’t get ahead. He didn’t know that old mobile homes on rented land (such as a trailer park) are worth nothing, and are a loss when you account for the cost of trucking it to the dump. He expected to at least break even when he sold his mobile home.
Recommended Stories For You
Those who live in the home see its value. This is where they live. This is where they put in thousands of dollars. Most people look at a structure and can’t imagine that it’s depreciating.
But this is exactly what an investor should know.
Mobile homes depreciate yearly because they are not tied to the ground, investors say. What’s appreciating is the location, the land. If you own that land, you are profiting.
Mobile home parks can be a good investment for those who own the land and then rent the space and/or the unit. There are many people who want the low-ball $300- to $400-a-month rent in a city where apartments average $600 a month.
Dave Schoeppler, co-owner of the mobile home park where Bloom lives, said he has a waiting list for renters. He is renting out some units for $650 a month until the owners demolish the park to make way for affordable housing. The deposit is $250, compared to upwards of $400 in an apartment complex.
“It’s definitely not perfect by any means, but it’s safe, air-tight and livable for someone who wants a yard an privacy,” Schoeppler said.
Mobile homes are often the best option for the elderly, who are on Social Security and living on small incomes, said John Uhart, a commercial broker and the property manager at Frontier Mobile Home Park,
Even though his investment in a mobile home left him with no equity, Bloom decided to buy another mobile home for $3,500 on land in Storey County that he will rent for $400 a month. His girlfriend has started a new, higher-paying job, which should help the family out more.
“If everything pans out, we’re making more money, things are starting to click. We’ve had dry wallers (installers) in our new place every weekend getting it done.
“I’m pretty encouraged, but it was slow and scary for awhile.”
• Contact reporter Becky Bosshart at email@example.com or 881-1212.