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As always – our mission to work together to create a financial win-win for all parties involved, and we think John Oliver did a great story on the subject in the end. Let’s say a Mom & Pop owner has one pad/lot to rent out. They have been earning $200/month after expenses to have your mobile home sit on it. Someone else owns the mobile home that sits on top of it, and they’ve been there for 10 years. Mom & Pop are happy with their revenue and haven’t raised rents for a long time.
Check out our podcast focusing on affordable housing and our blog with tips & tricks for all homeowners. See our selection of affordable single-wide mobile homes. Peace, harmony, healthy building materials, efficiency - at elk there is everything with comfort and a feel-good factor. This is a projected, optional single-family house from...
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He does make jokes that may sound crude but he also talks about treating residents fairly and not jacking rents up overnight. In my affordable living parks, a basic $7.50/hour full-time job is enough to buy an older home. It is not enough to rent anything like it anywhere. HBO’s latest episode of Last Week Tonight with John Oliver unpacked the predatory nature of investors sweeping in on the financial accessibility of mobile homes. Sure, but in many areas of the country home buyers can’t find a traditional site-built home for under $200,000.
But is it possible to create a true win-win and make your short-term rental more sustainable and make you more money in the process? I’m happy to say that it is possible and that I’ve done it on my own rentals. But if you own a house without the land under it, you own the piece of the housing that loses value, while the investor owns the piece that appreciates over time.
John Oliver Isn’t Wrong About Mobile Homes, But There’s More to the Story
This is the wealth killer that John Oliver explains in the video. It’s the opposite of the second scenario above – the house is now a commodity that loses value, and you don’t own the land under it that goes up in value. And what is the main factor that basically all commercial real estate value increase is based on? John Oliver had a very interesting segment earlier this week that highlights some great points on the state of the mobile home industry, both from an investor and ownership perspective. If he took the time to talk to the largest Mobile Home appraisal company, who works with many of the MH lenders who lend money on older mobile homes, mobile homes are now being appraised by their location just as any house would be.
Multiply this out on a mobile home park that has 100 lots, and that’s a $900,000 gain (100 x $9,000 each lot). Mobile homes can be a great way to live affordably, and if you check them out lately, you’ll find that they can be of high quality and very nice! But there can be real risks that lie in the underlying monetary and market mechanics behind the industry, and some can be truly detrimental to owners, as explained in the John Oliver mobile homes episode we’ll cover here. Recently, private equity firms and other large investors are jumping in, he added. "So the homes of some of the poorest people in America are getting snapped up by some of the richest people in America, and luckily, there have been no problems whatsoever — except I'm obviously kidding, it's going terribly."
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And the correlation in unfavorable loan terms and mobile homes must be looked at in light of the demographics purchasing them—young families with little credit history and folks with poor credit histories and little to no down payment. One of the huge pitfalls of mobile homes, Oliver continued, is that someone can own the land beneath you, then ratchet up the rent on it. He pointed to a documentary clip of a woman not able to make her payments after the Carlyle Group bought her mobile home park and spiked the rent. “Mobile” and “manufactured” basically mean the same thing, in that they are the types of homes that are in the mobile home parks around the country. Nowadays they conform to the basic HUD code and come in single or double wide sizes, and are on wheels. In a new sketch on John Oliver’s late night comedy TV show, Oliver rips into the harsh realities for many folks living in mobile home communities across the country.
At $700/month lot rent you must have been in a very desirable area - what is the equivalent sized home renting for in the market? When this happens everyone in the entire community loses their home. Oliver ripped into Clayton Homes, owned by billionaire investor Warren Buffett, and other private equity firms for buying mobile home parks and raising rents on low-income Americans — exacerbating the chasm between rich and poor even more.
Rolfe talks about "coffee cup" annual raises, a $5 raise that is no more than buying a cup of coffee each month. He talks about how a $50/month increase in lot rent is the highest that should ever occur and only if the park is so far below market that the park is at risk of ceasing to exist at it's current income level. Obviously John Oliver did not sit through Frank Rolfe's entire class. Rolfe has a very dry, sense of humor and like any good comedian, sometimes you feel a little bad for laughing at the jokes. It's this sense of humor which makes sitting through a 3 Day Boot-camp very manageable.
On 'Last Week Tonight,' John Oliver examined how the mobile home industry allows some of America's richest people to prey upon the poor. For mobile homes owners, the “cars you live in” are reportedly an investment that always go down in value. They are an even worse investment if you don’t own the land that the mobile home is parked on, because “mobile homes are mobile about as much king crabs are actually kings,” said Oliver. For years, commercials have made buying mobile homes look more attractive than they really are, Oliver said at the beginning of the segment, before enlisting D’Arcy Carden of “The Good Place” to film a more realistic mobile home ad. Just rent the home – In this scenario it’s not bad because you don’t own a depreciating liability.
In recent years, private equity firms like the Carlyle Group have swooped in to purchase over 100,000 home sites previously run by mom-and-pop businesses, leading to spikes in rent/fees or the parks being torn down altogether. And although the “mobile” in “mobile home” might imply that owners could easily move to new locations, some of these properties are impossible to transfer without damaging — 80.1 percent of them never leave their original spots. Those profits are not made through traditional mortgages but through high-interest, shorter-term “chattel loans” – the type often used to buy a car. Mobile home parks are generally going away and are in less supply, or at least more are not being built. Cities and counties don’t like them, and there’s the whole NIMBY factor .
"There are many misconceptions about mobile, or 'manufactured,' homes," John Oliver said on Sunday's Last Week Tonight. For example, "it can be genuinely hard to tell the difference between manufactured homes and conventional homes," and about 20 million people in the U.S. live in what has been "one of America's last affordable housing options," kind of. They are a rental property, but people own their homes... A blend between what it is like to own a condo, be part of a HOA, private community, a single family house neighborhood... It's this country's last truly affordable living.
And it generally increases in value over time. This is great for the investors, but what about the homeowners? Well, if you’re renting a lot now you just have to come up with another $60 per month, or $720 per year.
Helping families become homeowners is our passion and you won't find a more dedicated team anywhere. We're sure you have questions on this process and what options will work best for you. These homes are move-in ready including land and all utility hook-ups. The host brainstormed solutions to some of these problems but cautioned prospective buyers to stay realistic.
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