Understanding the Ins and Outs of Mobile Home Lot Rent
More and more people each day want to buy a mobile home or manufactured home. Homes made in a factory are loaded with new technologies. They’re energy-efficient, and they can be purchased quickly at a fraction of the cost for stick-built homes.
When it comes to buying or renting a home, many frequently asked questions revolve around the topic of mobile home lot rent or lot leases.
This article will explain what lot rent is, what it means, why it matters and how much you might expect to pay.
What is Lot Rent?
Lot rent, or a lot lease payment, is a rental/lease contract on a lot of land. Every month, rent is paid to the property owner where a mobile home is located. Often times, the homeowner will get a loan for a mobile home that pays for the home itself, but not the land it will sit on. For those who want to become a resident of a mobile home park, or manufactured home community, a monthly lot rent payment should be expected.
Manufactured home communities generally are for-profit businesses. They provide a service to residents who own the home, but not the land. In other words, the property owner provides leased land for a fee.
What Does it Pay For?
Many land-lease community owners roll monthly utility payments and other services into the lot rent. If you don’t pay a water bill, it’s likely because the water for the park is included. A good question to ask a community manager is “What is included in my lot rent?”
Other amenities that may be included are garbage pickup, cable TV, internet access or other similar services.
General Maintenance / Upkeep
A manufactured home community, like any other residential development, requires attention. The lawn needs to be mowed or the snow removed, as well. And then there’s general maintenance on facilities, such as a clubhouse, pool or dog park.
In addition, any property owner needs to keep a fund for infrastructure upgrades. This is for heavier maintenance. Good examples are repair or replacement of roads, water and sanitation pipes, front gate and fencing.
Who Collects Lot Rent?
A community manager will be the one to collect. Many times the payment simply is sent to the manager’s office. However, other times a community operator might ask that lot rent is sent to another address.
How Much Does Lot Rent Cost?
The amount of lot rent a resident pays will vary depending on the market where the homes are. If you live in a big city, like Detroit, Buffalo, Los Angeles or Orlando, where housing is at a premium, you can expect to pay more than residents in smaller cities or rural areas.
Lot rent may also go up depending on the type of mobile home community you live in, regardless of where the community is located. If there are a lot of amenities, or high-price amenities, such as a clubhouse, pool, walking trails, workout facilities and such, you can expect to pay more.
The following chart is an overview of the average lot rents in different markets throughout the country.
Does Lot Rent Cover any Property Taxes?
Yes. The community owner has to pay taxes on the property, so part of any resident’s monthly lot rent will go toward property taxes.
Can I Claim Mobile Home Lot Rent on My Taxes?
Yes, lot rent on a mobile home is tax deductible – your monthly payments can be submitted on your state income tax return. The expected refund will vary from state to state. However, most states view mobile home lot rent as a form of property tax payment that can be reimbursed.
See our blog post All About Mobile Home Taxes for more information on a variety of subjects related to taxes on mobile homes.
Do All Mobile Homes Have Lot Rent?
No, not every mobile home will have lot rent. It is most often an agreement between the owner of the home and the owner of the property where the home is located.
However, not every manufactured home community resident pays lot rent. Residents who rent a home will pay within the monthly home rental agreement. In other words, most often there is no specified lot rent for a home that is owned and rented by the community or park.
Additionally, most residents with homes on private land will not pay separately for lot rent. This is for a number of reasons. If you own the home and the land, you’re already paying that expense, clearly. If someone you know owns the land, like a family member or friend, you may not have to pay rent. And, like in communities, if you rent a home on private land, any land-lease agreement would be incorporated into the general rent payment.
Is Mobile Home Lot Rent Monthly?
Most lot rent agreements or land-lease arrangements are based on a monthly payment. In rare situations, a community owner or landowner may ask for quarterly payments, which may be beneficial if the resident is provided a discount.
Will My Lot Rent Change?
Lot rents for a mobile home are sure to increase regardless of where your home is, and who you pay the annual fee to. Any manufactured home community resident should expect an annual or bi-annual increase that, if nothing else, adjusts for inflation. In other words, as the land becomes more valuable, the space you rent becomes more valuable as well. And you should expect to pay accordingly.
In some cases, a property owner may make substantial improvements to a community and increase rates accordingly. Let’s say ownership decides to put in street lighting that’s been much needed. A portion of that cost may be handed down to each resident who benefits from the added lighting. The same would go for road improvements, utility expansion, or additions the community makes to lifestyle amenities, such as pickleball courts or dog-wash stations.
Average lot rental increases nationwide are about 3 percent. A park that has not experienced an increase in several years may get a larger increase to bring the level to the current market average, particularly if a park or community is under new ownership.
What Happens If I Don’t Pay My Lot Rent?
Residents who fall behind on the lot rental payment can expect a phone call or knock on the door from the park manager or community operator. As a result, if a resident doesn’t respond, or can’t pay, the manager or owner of the property likely will begin the eviction process. A lawsuit may be filed, which means a judge could order the home be removed from the park.
Where Can I Go to Find Mobile Home Lots for Rent?
As the nation’s leading marketplace for manufactured homes, MHVillage has over 39,000 community listings, offering an extensive selection of site rentals throughout the country. Find available mobile home lots in a community near you.