Author Topic: Potentially Purchasing a Trailer  (Read 1535 times)


  • 5 O'Clock Shadow
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Potentially Purchasing a Trailer
« on: August 24, 2015, 06:14:46 PM »
OK, so here's the run down.  I have a family member who is looking to sell their second home.  This is a single wide trailer 2/2, where they own the 1/6th of an acre of land, in central Florida.  Purchase price would be around 20K.  Similar trailers rent for around $650 per month in the area.

I'm thinking of purchasing it and renting it out as a side investment, using a property manager.  So here's what I'm thinking number wise:

20K purchase
1K transfer taxes
1K cleaning / minor refurbs (its in good shape I was just in it recently)
22K all in

Annual Income/Expenses:

+$7150 -- ($650 x 11 months)
-$715 -- (Property Management)
-$715 -- (Assume 10% repair fund)
-$715 -- (Roughly 10% taxes and insurance)

$5005 - Net Annual Income

25% annual return

So, unless I'm wildly off base, this seems like a reasonable investment, even if I'm low on the expense side, or high on my anticipated rent side. 

Also, purchasing this would be a big help to my family member.  So, is this an insane idea or does it seem somewhat reasonable?

Edit - We would do this with cash, and can easily afford to do this if it matters in the calculation.


  • 5 O'Clock Shadow
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  • Age: 30
  • Location: Seattle
Re: Potentially Purchasing a Trailer
« Reply #1 on: August 24, 2015, 06:24:37 PM »
The question is CAN you rent it out at that rate? Done any market research?  Is there a lot of these on the market for rent? When they go on the market for rent,d o they rent fast?

Also this may be off base, however I always assumed a lower rent means you can likely see a higher cost of repairs needing to be done when the person leaves. I would look at 20% in terms of repairs.

Also is it possible for you to do the property management? That could make up for the difference in potential repairs. Also is it possible for you to do the repairs yourself?

I'm sure people have other comments, but i thought I'd just get my cents out there.

I'd also like to see what others think of this, as it could be a future investment for me ;)


  • 5 O'Clock Shadow
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  • Posts: 24
Re: Potentially Purchasing a Trailer
« Reply #2 on: August 24, 2015, 07:37:56 PM »
Honestly, I'm at tire kicking stages so I don't know about rentability.  The little bit of research I did showed Zillow's estimates in the $800 range for rents, but on ads I saw prices $650-750.  No idea how fast they rent.  I will know tomorrow when I talk to some property managers.


  • Senior Mustachian
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Re: Potentially Purchasing a Trailer
« Reply #3 on: August 24, 2015, 08:09:53 PM »
Can you afford to lose 20k? If you can, I think I'd at least explore it further. Also, is the price fair to the seller? They're family, meaning they and their heirs will stay in your life. Will there be any resentment that you "stole" this property when their luck was down?


  • Stubble
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Re: Potentially Purchasing a Trailer
« Reply #4 on: August 25, 2015, 01:03:52 PM »
That's a really low price even for a trailer in Florida.  Talk to a real estate agent.  Get a real market value on this property.  Collect all the data.  Is it in a floodplain?  Are there any issues with the location of this property?  Could you sell it later if need be (and recoup your investment or make money)? 

What I know about mobile homes - it's difficult to get loans on them.  very few lenders write loans on them, zero lenders lend on old mobile homes, so you will also be selling to a cash buyer in the future, should you choose to or need to sell.  People who rent them are typically in reduced circumstances.  Sometimes this means they will trash the place, be difficult to get out and or not pay.  I suggest you do extra diligence when renting - visit the home of potential renters.  You only want to rent to those who keep their current home in a manner that you'd like your rental kept in. 

A cheap purchase may mean you are buying other people's problems.